Vanuatu: GPOBA Improved Electricity Access Project Project Code: P133701

GPOBA Trust Fund No. 016279

Financed by

Global Partnership on Output Based Aid (GPOBA) Grant through The International Development Association (World Bank)

Project Operations Manual

Of the GPOBA Improved Electricity Access Project Implemented

by The Ministry of Climate Change and Natural Disaster

through its Department of Energy

WHEN

WHAT

HOW

WHO

Vanuatu: GPOBA Improved Electricity Access

ACKNOWLEDGEMENTS

The Government of Vanuatu expresses its deepest appreciation to the World Bank staff that made valuable suggestions for improvements in the Project Operational Manual. The Government of Vanuatu also wishes to thank the utilities, UNELCO and Vanuatu Utilities and Infrastructure Limited [VUI], for their support and cooperation of the completion of the Project Operational Manual

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Vanuatu: GPOBA Grid-Based Electricity Access Project TABLE OF CONTENTS

A. MANUAL’S PURPOSE AND DEFINITIONS .................................. Error! Bookmark not defined.

B. CONTACT DETAILS OF PROJECT PARTNERS ......................................................................... 7

C. PROJECT DOCUMENTS ....................................................................................................... 8

CHAPTER 1: PROJECT DESCRIPTION ....................................................................................... 9

1.1 Project Background Information ........................................................................................................... 9

1.2 General Project Objectives .................................................................................................................... 9

1.3 Project Components and Costs.............................................................................................................. 9

1.4 Target Group and Eligible Household Criteria...................................................................................... 11

1.5 Subsidized Inputs, Subsidy Amounts, Consumers’ Contribution and Subsidy Payment Schedule ........ 11

1.6 Output Verification – Independent Verification Agent ........................................................................ 14

1.7 Process for connecting customers and reimbursing service providers ................................................. 15

1.9 Safeguards Compliance ....................................................................................................................... 18

CHAPTER 2: PROJECT REPORTING ........................................................................................ 19

2.1 Financial Reporting ............................................................................................................................. 19

2.2 Financial Audit .................................................................................................................................... 19

2.3 Project Reports ................................................................................................................................... 19

2.4 Project Completion Report .................................................................................................................. 20

2.5 Reporting Summary ............................................................................................................................ 20

CHAPTER 3: IMPLEMENTATION MILESTONES ....................................................................... 21

CHAPTER 4: PROJECT IMPLEMENTATION ARRANGEMENT .................................................... 22

4.1 Organizational Design ......................................................................................................................... 22

4.2 Implementation Responsibilities ......................................................................................................... 22

CHAPTER 5: PROJECT PROCESSES ......................................................................................... 24

5.1 Planning and Budgeting ...................................................................................................................... 24

5.2 Procurement ....................................................................................................................................... 24

5.3 Project Financing and Disbursements ................................................................................................. 26

5.4 Financial Management ........................................................................................................................ 28

5.5 Accounting .......................................................................................................................................... 28

5.6 Archiving ............................................................................................................................................. 29

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5.7 Assets Register .................................................................................................................................... 29

5.8 Project Termination and Closure ......................................................................................................... 29

5.9 Good Governance - Fraud detection ................................................................................................... 30

5.10 Project Monitoring .............................................................................................................................. 30

5.11 Role of the World Bank during implementation .................................................................................. 30

ANNEX 1: STAFFING ............................................................................................................. 31

ANNEX 2: PROCUREMENT PROCESSES EXAMPLES & WORLD BANK PRIOR REVIEW RELATING

TO THE PROJECT IMPLEMENTATION UNIT ............................................................................ 32

A.2.1. Shopping For Goods and Works ............................................................................................................. 32

A.2.2. Selection of a firm based on Consultants’ Qualification (CQS) ............................................................... 32

A.2.3. Selection of Individual Consultants (IC) ................................................................................................. 32

A.2.4. World Bank Prior Review ....................................................................................................................... 32

ANNEX 3 PROCUREMENT POLICIES FOR SERVICE PROVIDERS ............................................... 60

ANNEX 4: GRANT AGREEMENT ............................................................................................ 61

ANNEX 5: DISBURSEMENT LETTER ....................................................................................... 75

ANNEX 6: INITIAL PROCUREMENT PLAN ............................................................................... 89

ANNEX 7: OUTPUT VERIFICATION REPORT TEMPLATE .......................................................... 91

ANNEX 8: SAMPLE CONSENT LETTER .................................................................................. 100

ANNEX 9: PROJECT REPORT ............................................................................................... 101

ANNEX 10: Standard Wiring Design .................................................................................... 105

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Definitions The key definitions related to this project are listed following: Household: A household consists of all the people who occupy a housing unit. A house, an apartment or other group of rooms, or a single room, is regarded as a housing unit Dwelling: means a single household space or several household spaces sharing same facilities

Eligible Household means a Household that has no formal or individual connection to the electricity grid, that qualifies for connection as a Small Domestic Consumer, and that applies for a subsidized connection under the Project

Household Wiring means the installation of wiring from the utility meter box to a ready board within an Eligible Household, such wiring to be in accordance with the standards set forth in the Project Operations Manual. Ready Board will include necessary protection, and up to two light sockets with switches, two power outlets and two energy saving light bulbs Independent Verification Agent or IVA means the agent to be appointed by the DoE to be responsible for verification of eligible outputs (claim for reimbursement) submitted by each Service Provider under the project and preparation of an Output Verification Report as a basis for OBA Subsidy Payments, in accordance with the provisions set out in the POM and the Subsidy Implementation Agreement OBA Subsidy means the amounts to be paid to a Service Provider for Household Wiring or Service Connections, in accordance with the POM and as verified by the IVA Output Verification Report means a report prepared by the Independent Verification Agent, certifying Service Connections in accordance with the provisions of the POM Service Connection means a connection directly from the existing distribution lines either above ground or below ground to the utility meter box for the Eligible Household, including cables, fittings, fuses, labor, and (where necessary) installation of an additional power pole to facilitate the Service Connection Service Provider means the Union Electrique du Vanuatu Ltd. (UNELCO) or Vanuatu Utilities and Infrastructure Limited (VUI) individually, both established under the Company Act, CAP191 of the Laws of the Recipient, and as per the Electricity Act, CAP 65 of the Laws of the Recipient, mandated to provide electricity services in the Recipient’s territory; and “Service Providers” means UNELCO and VUI, collectively Small Domestic Consumer means the category used by each Service Provider for low–consumption users with access to a tariff charge below the base tariff cost Subsidy Implementation Agreement means the agreement between the Recipient (Government of Vanuatu) and each Service Provider setting forth implementation agreements for Parts 1 and 2 of the Project, as described in Section 1B of Schedule 2 of the Grant Agreement (refer Annex 4)

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B. CONTACT DETAILS OF PROJECT PARTNERS

Grant Funder: Grant Fund Administrator: WB Task Team Leader (TTL):

Global Partnership on Output Based Aid (GPOBA) through The International Bank for Reconstruction and Development and International Development Association The World Bank (WB) 1818 H Street, NW. Washington DC 20433 U.S.A. Facsimile: 1-202-477-6391 Mr. Kamleshwar Khelawan The World Bank in Sydney Level 16, 14 Martin Place CML Building SYDNEY NSW 2000 AUSTRALIA Telephone (612) 9235 6573 Fax (612) 9235 6593 Email: kkhelawan@worldbank.org

Grant Recipient:

Government of Vanuatu Hon. Maki Stanly Simelum Minister of Finance and Economic Management Port Vila, Vanuatu Telephone: (678) 33025

Project Implementing Agency (PIA):

Mr. Jesse Benjamin Director, Department of Energy Port Vila, Vanuatu Telephone: (678) 25 201

Project Management Unit (fiduciary support) – PMU

Mr. Brian Phillips Project Management Unit, Vanuatu Meteorology and Geo-Hazards Department Port Vila, Vanuatu Telephone: (678) 24686

WB Disbursements Team

Attention: Loan Department THE WORLD BANK 26th Floor, One Global Place 5th Avenue corner 25th Street Bonifacio Global City Taguig City, Philippines Email: dzita@worldbank.org

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C. PROJECT DOCUMENTS More detailed information about the project can be found in the following project documents that should be archived in the files of the DoE:

1. Grant Agreement (between WB and the Government of Vanuatu) (Annex 4); 2. Subsidy Implementation Agreement (between Government of Vanuatu and the Service Providers

(UNELCO and VUI); 3. GPOBA Project Paper (WB document), with overall information about the project; 4. Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework

(RPF); 5. Procurement Plan; 6. Disbursement Letter (Annex 5); and 7. Project Operations Manual

In case any one of them is missing, the project staff can request copies from the WB TTL. Other important World Bank documents for project’s implementation are the following: 1. Standard Conditions for Grants Made by the World Bank out of Various Funds, dated February 15, 2012: http://siteresources.worldbank.org/INTLAWJUSTICE/Resources/STDGC-English-12.pdf 2. Disbursement Guidelines for Projects, dated May 1, 2006: http://siteresources.worldbank.org/PROJECTS/Resources/DisGuideEng.pdf 3. Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBDRD Loans and IDA Credits and Grants, dated October 15, 2006 and revised in January 2011: http://siteresources.worldbank.org/INTRUSSIANFEDERATION/Resources/ibRD_IDA_AnticorruptionGuidelines.pdf 4. Procurement Guidelines A: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers dated January 2011: http://siteresources.worldbank.org/INTPROCUREMENT/Resources/278019-1308067833011/Procurement_GLs_English_Final_Jan2011.pdf 5. Procurement Guidelines B: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers dated January 2011: http://siteresources.worldbank.org/INTPROCUREMENT/Resources/278019-1308067833011/Consultant_GLs_English_Final_Jan2011.pdf

In case any one of them is missing, the project staff can request copies from the WB TTL.

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CHAPTER 1: PROJECT DESCRIPTION

1.1 Project Background Information The total project budget is USD 4,850,000.00. The table below presents the main project data related to the World Bank financing through the grant agreement:

Grant Agreement TF016279

Signature June 02, 2014

Anticipated Effectiveness September 01, 2014

Closing June 30, 2018

Application Deadline (Grace Period) October 30, 2018

Signed Amount USD 4,850,000.00

Implementation Completion Report 6 months after Closing

Final External Audit Report 6 months after Closing

1.2 General Project Objectives The objective for this project is to support the Government of Vanuatu to increase sustainable access to formal grid-based electricity services within Vanuatu’s electricity concession service areas for low income customers through targeted subsidies. The Project is expected to subsidize the cost of grid-based Household Service Connections and Household Wiring for approximately 4,375 low-income households. 1.3 Project Components and Costs As Project Implementing Unit, the Department of Energy (DoE) will implement the project, structured around 4 components, as follows: Component 1 provides one-off OBA Subsidy to cover up to 80 percent of the cost of connecting low-income households to grid-based electricity services in Vanuatu (Service Connections). The OBA Subsidy will be available for both post-paid electricity meters and pre-paid meters (where available). The component will be implemented through existing private sector Service Providers – Union Electrique du Vanuatu Limited (UNELCO) and Vanuatu Utilities and Infrastructure Limited (VUI), and will be subject to verification by the DoE.

Component 1: OBA subsidies for new electricity connections for low income households

GPOBA (USD million)

Consumer Contribution

(USD million)

Total (USD million)

One Off OBA Subsidy to cover up to 80% of the cost of connecting Households up to a maximum of 5 A

2.2 0.52 (approx.)

2.72

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Component 2 provides one-off OBA subsidies to cover the cost, up to VUV 40,000, of Household Wiring for low-income households accessing a Service Connection under the project (Household Wiring). Household Wiring comprises installation of wiring from the utility meter box to a Ready Board within the premises. The Households will be wired according to a standard design for the project in accordance with Australian and New Zealand standards (AZ/NZS 3000). Household Wiring will include cabling and backfilling (in a trench prepared by the consumer) from the utility meter box to a Ready Board in the consumer’s premises. The Ready Board will include necessary protection, up to two lights sockets with switch, two power outlets and two energy saving light bulbs. For safety reasons, the wiring will be carried out and/or certified by qualified (Grade A, Australian Electrical/Mechanical Fitters license or equivalent) electrical contractors contracted or electrical contractors authorized by UNELCO or VUI to carry out the works. The Service Providers will supervise the electrical contractors and on completion, provide verification that the internal wiring has been completed to standard.

Component 2: OBA subsidies for Household Wiring for low-incomes households accessing electricity services under the project

GPOBA (USD million)

Consumer Contribution

(USD million)

Total (USD million)

Connecting a household to the utility network through agreed standard installation of wiring from the utility meter box to a Ready Board within the premises

2.1 0.00 2.1

Component 3 This component will fund the cost of project management, communications and outreach, and training as per the approved budget and procurement plan. The DoE will require support throughout the project’s life to oversee implementation and develop longer-term institutional capacity for managing energy-related subsidies. Funding from this component supports the DoE with the following:

(a) Development and adoption of technical standards and licensing scheme for Household Wiring, including delivery training programs for electricians and monitoring compliance with standards;

(b) Technical project implementation, monitoring and evaluation and, financial management of OBA subsidies;

(c) Outreach and education to raise beneficiaries’ awareness of the OBA subsidies under Components 1 and 2, and training on safe electrical practices;

(d) Technical training, support and, incremental operating costs for DoE; and monitoring and evaluation, financial management, supervision and audit of the project.

Component 3: Implementation support for project management, communications and outreach, and training

GPOBA (USD million)

Consumer Contribution

(USD million)

Total (USD million)

This component includes development and adoption of technical standards, beneficiaries’ awareness, goods needed to implement the project, training and safety awareness and M&E system.

0.35 0.00 0.35

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Component 4 this component will fund a suitably qualified consultant or firm as an Independent Verification Agent (IVA) to undertake the verification of outputs under the project.

Component 4: Independent Verification Agent

GPOBA (USD million)

Consumer Contribution

(USD million)

Total (USD million)

Suitable and qualified consultant to undertake verification of the Service Connections under GPOBA Subsidy.

0.20 0.00 0.20

1.4 Target Group and Eligible Household Criteria

The targeted group is Households based within existing grid areas that are not directly connected to the grid. They may have no connection, or be connected through a third party. Consumers will self-select for the OBA Subsidy and request a service connection from their Service Provider, as per current processes and must qualify as an Eligible Household to receive an OBA Subsidy for Service Connection and Household Wiring. The following criteria will be used to determine an Eligible Household who may benefit from OBA subsidies under the project:

(a) Beneficiaries fall under the Small Domestic Consumer category;

(b) Beneficiaries will be entitled to a 5A connection;

(c) Beneficiaries must use 5A connection for a minimum of 12 months – except in the final year where the period of restriction is from the date of connection until the closing date of the project; and

(d) Beneficiaries may request postpaid and prepaid (where available) Service Connections.

A Household may apply for only a Service Connection, however to be eligible to receive an OBA Subsidy for Household Wiring a household must receive a Service Connection under the project. The Eligible Household will be required to sign an agreement at time of application acknowledging that their right to upgrade past a 5A connection within the first 12 months is subject to full repayment of the subsidy amount. 1.5 Subsidized Inputs, Subsidy Amounts, Consumers’ Contribution and Subsidy Payment

Schedule

1.5.1 Subsidized Inputs The OBA Subsidy will cover the cost of the following inputs:

(a) Service Connection: connecting a Household to the Service Provider network, including

cables, fittings, fuses and labour; and (b) Household Wiring: to agreed standard and a Ready Board to cover basic lighting and

power outlets.

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1.5.2 OBA Subsidy Amounts The average amount of subsidy and consumer contribution is determined by which concession areas the Eligible Household is located. In general, the subsidy will be as follows:

For Households based in UNELCO’s Concession Areas: 80 % of the actual cost of a Service Connection for a postpaid or prepaid meter and the cost of Household Wiring up to VUV 40,000.. No individual Service Connection cost should exceed VUV 88,000.

For Households based in VUI’s Concession Area: On average VUV 45,000 subsidy toward the cost of a Service Connection with postpaid meter; on average VUV 39,600 subsidy for a Service Connection with prepaid meter, where available, and VUV 30,000 subsidy for a Service Connection with a meter only and the cost of Household Wiring up to VUV 40,000.

Details of the cost of Service Connections by type and Household Wiring will be submitted to and assessed by the IVA and reported on an aggregate basis in the Output Verification Report (OVR). In the event that the expected average subsidy amount for a Service Connection exceeds VUV 45,000 then the project may be subject to further review and approval by the World Bank. The subsidy for Service Connections and Household Wiring will be applied to VAT exclusive costs. For clarification, VAT will only apply to the consumer contribution for Service Connections and Household Wiring. 1.5.3 Consumers’ Contribution Eligible Households will be required to provide a cash and in kind contributions as part of receiving a Service Connection and Household Wiring under the Project. Consumers’ contribution in cash will be as follows:

For Households based in UNELCO’ grid areas: 20% of the actual cost of a Service Connection and the actual cost of Household Wiring in excess of VUV 40,000;

For Households based in VUI’s grid areas: the amount in excess of a VUV 45,000 towards the

cost of Service Connection with postpaid meter and in excess of VUV 39, 600 for prepaid meter, where available, and the amount in excess of VUV 40,000 towards actual costs of Household Wiring. The amount in excess of VUV 30,000 for a meter only connection.

Consumers’ Contribution: In addition to the above, the consumer, independently of the area of concession, will be responsible for organizing the digging of a trench for the laying of wiring and, when required, a hole for a pole to facilitate the Service Connection which will be at the consumer’s cost or completed as works in kind. Eligible Households will arrange for the preparation of their easement from the public boundary to the house. 1.5.4 Summary of OBA Subsidy Levels and Consumers’ Contribution The above OBA Subsidy benefits and expected consumers’ contributions are outlined in the table below:

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Service Connection

Household Wiring

Consumers’ Contribution

In Cash

Consumers’ Contribution

In kind

UNELCO

80 % of the actual cost of a postpaid Service Connection. 80% of the actual cost of a prepaid Service Connection. No individual Service Connection cost should exceed VUV 88,000.

Actual cost up to VUV 40,000.

20% of the actual cost of a Service Connection + the actual cost of Household Wiring in excess of VUV 40,000.

Organize access, clearing vegetation, arranging the digging a hole for a pole for a Service Connection (if required by the Service Provider), and arranging the digging of cable trenches from the property boundary to the house as required.

VUI

On average VUV 45,000 subsidy toward the cost of a Service Connection with postpaid meter. On average VUV 39,600 for a prepaid meter, where available. VUV 30,000 for a meter only connection.

Actual cost up to VUV 40,000.

The amount in excess of the subsidy toward the cost of a Service Connection with postpaid meter. The amount in excess of the VUV 30,000 subsidy for a prepaid meter, where available.

Organize access, clearing vegetation, arranging the digging a hole for a pole for a Service Connection (if required by the Service Provider), and arranging the digging of cable trenches from the property boundary to the house as required. .

1.5.5 OBA Subsidy Payment Schedule A claim for OBA Subsidy for outputs (invoice from Service Providers) will be paid following verification of output and in accordance with the IVA’s findings in the OVR. OBA Subsidy payments will be made via direct payment to the Service Provider. Payments for verified prepaid and postpaid Service Connections and Household Wiring will be paid in accordance with the payment schedules following. The Payment schedule for Prepaid connections: The OBA Subsidy will be paid in one payment as follows:

Subsidy Payment/ Installment

Size Criteria

First 100% of OBA Subsidy for OVR from IVA against the verification

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Household wiring. + 100% of OBA Subsidy for Service Connection. - 100% of OBA Subsidy for Service Connections and Household Wiring subsequently determined ineligible for an OBA Subsidy.

criteria.

The Payment schedule for Postpaid connections: The OBA Subsidy will be paid in two tranches as follows

Subsidy Payment/ Installment

Size Criteria

First 100% of OBA Subsidy for Household wiring. + 80% of OBA Subsidy for Service Connection. - 100% of OBA Subsidy for Service Connection and Household Wiring subsequently determined ineligible for an OBA Subsidy.

OVR from IVA against the verification criteria.

Second 20% of OBA Subsidy for Service Connection. - 100% of OBA Subsidy for Service Connection and Household Wiring subsequently determined ineligible for an OBA Subsidy

Against invoice and acceptable OVR from IVA that at least 80% of the new postpaid connections are still active

1 after 3 months,

in which case the remaining 20% of the OBA Subsidy will be paid in full for all connections, In the event that less than 80% of these connections are active, the remaining 20% of the OBA Subsidy will be paid on a proportional basis calculated as: the number of active after 3 months/ total connections made under a given claim multiplied by funds outstanding.

1.6 Output Verification – Independent Verification Agent

An Independent Verification Agent (IVA) will be contracted by the DoE to verify the outputs in accordance with OBA principles

2 and the project document by way of an Output Verification Report

1 An “active” connection refers to one that has not been disconnected from the utility service for non-payment only.

For clarification, a Service Connection that has been disabled for any other reason, such as consumer relocation, safety, switching from a new postpaid to a prepaid connection, etc. will not be counted as a non-active connection.

2 The core concepts of Output Based Aid are: targeting the use of subsidies; accountability for results; encouraging innovation and

efficiency; use of incentives to serve the poor; output verification and monitoring of results; sustainability.

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(Annex 8). The role of the IVA is to verify the delivery of outputs against which the OBA Subsidy will be disbursed, according to the following Verification Criteria:

(a) Compliance with the Household Eligibility Criteria; (b) Compliance with the Output-Based Specifications

3;

(c) Compliance with the agreed specifications for Household Wiring; and (d) Report on upgrades within 12 months.

The IVA will be requested to perform the verification of Service Connections within 22 business days (1 calendar month) of receiving the claim for OBA Subsidy (invoice from the Service Provider) and is required to complete the following as per the Terms of Reference for the IVA:

(a) Desk based verification of all Service Connections installed by the service providers (utilities) under the project;

(b) Physical inspection and verification of a random sample of a least 20 percent in the first year and at least 10 percent in subsequent years of the Service Connections and Household Wiring. To maximize the IVA’s time and resources, physical verification may be clustered by concession area – Port Vila, Tanna, Malekula and Luganville;

(c) Desk/Physical verification 12 months later that no one has upgraded; and (d) Average cost of Service Connections by category (with pole, without pole, and meter only for

both prepaid and postpaid Service Connections).

1.6.1 Output Verification Report The Independent Verification Agent will prepare an Output Verification Report based on the information provided by the Service Providers with the claim for reimbursement. No payment for OBA Subsidies shall be made until and unless the IVA has verified the respective Service Connections and Household Wiring and prepared an OVR. The IVA will verify the Service Connections indicated in the connections’ report, based on all necessary data and information provided by the Service Providers to the IVA/DoE. The IVA will then produce an OVR for the DoE’s review within 22 days (1 calendar month). Acceptance of the OVR will trigger the DoE to commence the process of disbursement to the service providers. Approval of the claim for OBA Subsidy and the OVR will then be used to prepare withdrawal applications for Direct Payment to the Service Providers, as discussed below in Section 1.7. As these reports and invoices will be used to prepare a withdrawal application to arrange payment of the OBA Subsidies an OVR must accompany each withdrawal application that requests direct payment of subsidies from the World Bank to the Service providers. The templates for the Output Verification Report Format are provided in Annex 7. The first template is for the first tranche of payment for OBA Subsidies for postpaid Service Connections and payment of OBA Subsidies for prepaid Service Connections. The second template is for the second tranche of payment for OBA Subsidies for postpaid Service Connections.

1.7 Process for connecting customers and reimbursing service providers

The following steps will be followed to provide Eligible Households with electricity under the project and is in overall compliance with the Environmental and Social Management Framework (ESMF):

Step 1: Application and Connection Process

3 OBA Based Specifications includes the following technical solutions – Service Connection and Household Wiring as defined in

1.5.1 and the Household Wiring standard design attached at Annex 10

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(a) Consumer applies to the Service Provider for a connection, completes the necessary Service Provider application form or agreement, including a letter of consent for land access (if applicable) or/and a certificate of title for the land, showing boundaries (if available) or a copy of a lease (if applicable), and authorization from of third party property owner(s) (if applicable). Refer Annex 8 for a Sample Letter of Consent;

(b) The Service Provider arranges inspection of the site and the wiring at the premises, and provides a quotation and agrees to the scope of work with the applicant and any other affected party. For connection to the Households involving access to the applicants’ property, to avoid adverse impacts, the Service Provider’s contractor and the applicant and any other affected parties meet onsite to agree on the optimal alignment and connection method.

(c) The consumer pays for consumer contribution for the service connection and a contribution for Household Wiring as required;

(d) Applicant organizes access from the street boundary to the house, clearing vegetation, digging a hole for a pole (if required by the Service Provider), and digging cable trenches from the property boundary to the house as directed by the Utilities or the Utilities’ contractors;

(e) When the above work is completed, the Service Provider or its contractor arranges cabling from the nearest distribution pole or box to the meter box and installation of an additional pole, if required;

(f) The Service Provider’s contractor arranges Household Wiring from the meter to a Ready Board in the Dwelling where current wiring does not meet standards or is not in place;

(g) Following an inspection to confirm that Service Connection and Household Wiring standards have been met, the applicant can sign the consumer agreement to have access to the electricity service.

The following diagram 1.1 illustrates the above mentioned processes.

Step 2: Verification:

(a) The Service Provider submits request for OBA Subsidy4 (Invoice from Service Provider) of

eligible costs including adjustments for any refunds due for non-eligible customers to DoE once

4 The claim for OBA Subsidy will detail by the total number of postpaid Service Connections, prepaid Service Connection and

Household Wiring by category.

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connection costs have reached the agreed limit of VUV 3 million or one every three months. All necessary information and data, including individual invoices for each consumer application, to support the claim for OBA Subsidy must be provided to the DoE.

(b) DoE requests it's Independent Verification Agent (IVA) to carry out verification of the Service Provider OBA Subsidy request within 22 business days (1 calendar month);

(c) IVA carries out assessment and completes an Output Verification Report. Based on the findings of the OVR, the IVA recommends DoE to authorize payment of OBA Subsidy to Service Provider’s on the basis of the OVR’s findings. Refer to the OVR template attached as annex 8.

The following diagram 1.2 illustrates the above mentioned processes.

Step 3: Payment:

(a) DoE process payment of the invoice to the Service Provider on the basis of the OVR and cleared by the IVA. The DoE will prepare a withdrawal application for a direct payment (refer 5.3.2 Disbursements Methods) to the Service Provider for payment of OBA Subsidies in accordance with the findings of the OVR. Direct Payment

5 is one of three disbursement

methods allowed to DoE, and the method recommended to be used for all OBA Subsidy payments. A withdrawal application for Direct Payment will include (a) a copy of the Invoice for payment from the service provider (claim for reimbursement); (b) Attached 4A of the Disbursement Letter; (c) A copy of the OVR from the IVA. Refer Annex 5 – Disbursement Letter for further details.

(b) The DoE submits the withdrawal application to the World Bank to process for payment. The World Bank processes the request for payment. The World Bank will contact DoE if any clarification of the Withdrawal Application is required.

(c) Payment of OBA Subsidies in accordance with the processed withdrawal application is made to the Service Provider.

1.8 Project Monitoring and Reporting The outputs of the project upon which OBA Subsidies will be disbursed includes new postpaid Service Connections and new prepaid Service Connections (where available), as well as Household Wiring. Outputs will be measured on semesterly bases and upon the submission of semesterly Project Report (annex 9) by DoE.

5 Under Direct Payment method following the necessary clearance and documentation, the World Bank will make the payment (for

the eligible subsidies) directly to the utilities. Direct payment will be made in Vatu

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Additionally, in an effort to assess and improve upon the effectiveness of this Grant, GPOBA has an interest in tracking additional project indicators that are not triggers for disbursements. Therefore, this project will also incorporate a series of Project Developmental Objectives (PDO) Indicators (shown in Chapter 2) to measure the overall impact that new services have on target communities. The DoE, as the Project Implementing Unit, will collect data and will make subsequent assessments during project implementation and produce a project performance report for comparison in a timely manner. More information on output verification and financial and performance reporting can be found in Chapter 2. 1.9 Safeguards Compliance

The project has an overarching social benefit of assisting access to electricity for those on low incomes. An ESMF and Resettlement Policy Framework (RPF) with mitigation measures has been developed and consulted with main stakeholders as well as with potential beneficiaries. The purpose of the ESMF is to:

(a) Meet the environmental, social and land laws and, regulations of Vanuatu, and; (b) Meet the environmental and social safeguard policy requirements of the World Bank, in

particular, to ensure that there is free access to the site, and informed and documented authorization for use of any land required and any assets that may need to be removed in relation to Service Connections.

It is a requirement that the project be implemented in strict accordance with both the ESMF and the RPF. As part of each Project Report a report on the results of monitoring the status of compliance with the ESMF and RPF activities during the period covered by the Report, giving details of:

(a) Measures take in furtherance of the ESMF and RPF; (b) Conditions, if any, that interfere or threaten to interfere with the smooth implementation of

the ESMF and RPF; (c) Remedial measures taken or required to be taken to address such conditions.

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CHAPTER 2: PROJECT REPORTING

The purpose of the reporting is to fulfill the requirements of the Government of Vanuatu and the World Bank and provide operational and financial management information for decision making. All the reports below are sent by the Project Implementing Agency (DoE) to the TTL (WB Task Team Leader The roles of Project Coordinator and Project Assistant will be filled by the Director of Energy and the On-grid Specialist, respectively, located in the Department of Energy.

2.1 Financial Reporting

The project reporting will be realized through semesterly interim unaudited financial reports (IFRs) by the Project Assistant in consultation with the Financial Specialist every calendar semester throughout the life of the project, beginning with the semester ending on 31 December 2014. The IFRs should be sent to the WB within 45 days after the end of each semester. The IFR model is in the Budget and reporting template. Each IFR shall be prepared by the Financial Specialist of the DoE in accordance to the disbursement categories listed in the Grant Agreement (Goods, Services, Consultant Services, Workshops/Trainings, Subsidies and Incremental Operating Costs) and the project components for the reporting semester, year to date and cumulative expenditure. The source and use of funds and closing cash balances will be clearly stated in the IFRs. In addition, commitments (contracted amounts not yet expended), will be included in the reporting.

The IFRs will be prepared based on the accounting records maintained by the Project Assistant;

The IFRs will be submitted to the Bank not later than 45 days after the end of the reporting period by the Project Coordinator, countersigned by the DoE.

2.2 Financial Audit

DoE will have the annual project financial statements audited through the Vanuatu Office of Auditor General that will produce an Audit Report and Management Letter. The DoE will send a copy of the Audited Financial Statements to the WB, before June 30 of each year. The Terms of Reference for the auditor will be prepared by the Auditor General and agreed and approved by the World Bank The Process to carry out the Financial Audit will be as follows:

DoE will prepare project annual financial statements and submit to Auditor General Office by the date as stipulated in the regulations;

The Project’s audited financial statements for the fiscal year will be sent to the DoE and forwarded by the Project Coordinator to the WB before June 30 of each year.

2.3 Project Reports

DoE will produce a Project Report for every calendar semester, and will send it to the World Bank within 45 days after the end of each semester. The first report will be sent to the WB by 31

st

January, 2015. The project report will follow the form attached as Annex 9. Progress will be measured against the following results indicators, presented in the GPOBA Project Paper – Section 3.2: Key Monitoring Indicators that need to be included in the Project Reports. To allow for the accurate monitoring of key monitoring indicators, service providers will submit all relevant data to the DoE on request, and as needed for the life of the project. Additionally, the DoE with assistance from the PMU, as required, will complete Sections 2 and 3 of the project report - Financial Report and Procurement Report - on behalf of the DoE.

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2.4 Project Completion Report

In accordance with the provisions of the Grant Agreement and the Standard Conditions, the Completion Report shall be furnished to the World Bank not later than 6 months after the Closing Date.

2.5 Reporting Summary

The above reporting outputs and the responsible units are outlined in the table below:

PROJECT REPORTING

Output In

charge of

Input required

from

To be delivered

to Frequency of Delivery

Financial Reports (IFR)

DoE PMU in the

VMGD World Bank

TTL

Each Semester - within 45 days after the end of each semester. First report due 31 January 2015 for semester ending December 2014

Audited Financial Statements

DoE

Vanuatu Audit Office

(or independent audit firm)

and PMU in the VMGD

World Bank TTL

Once per year - by 30 June each year (the first one will be due by 30 June 2015)

Claim for OBA Subsidy

Utilities DoE World Bank

TTL

Once total cost for Service Connections and Household Wiring made reach VUV 3 million or at least every quarter

Output Verification Report

IVA DoE and Service

Providers

World Bank TTL

Each Output Verification Report is prepared on receipt of a Claim for OBA Subsidyfrom the Service Providers and will be completed within 22 business days.

Project Report

DoE

PMU in the VMGD

and Service Providers

World Bank TTL

Each Semester - within 45 days after the end of each semester. First report due January 2015

Project Completion Report

DoE PMU in the

VMGD World Bank

TTL Once, no later than 6 months after project Closing Date

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CHAPTER 3: IMPLEMENTATION MILESTONES In order for the project to be considered as active and to commence implementation, the following steps need to accomplished: Step 1: Signature: The following documents must be signed:

Grant Agreement No.TF016279 signed by the WB and the Government of Vanuatu

Implementing Agreement signed by the Government of Vanuatu and the Service Providers –UNELCO and VUI.

Effectiveness: For the project to start making use of grants funds the Grant Agreement must be countersigned and the project declared effective by the World Bank.

Step 2: General Procurement Notice (GPN). The GPN is obligatory before initiating any contract and it should be published once at the beginning of the project, even before. The Project team sends the final GPN version to the WB for information and publishes it in Vanuatu and/or in the Client Connection, a WB site for disbursements. In case that DoE has no access to Client Connection, the DoE can also request the WB TTL to publish it in the Client Connection on behalf of the Project. All responses received from interested contractors, suppliers and consultants should be recorded and filed for later issuing of Invitations for Expressions of Interest (see Chapter 5). Step 3: Annual Budget and Procurement Plan. As soon as the Grant Agreement is countersigned, the DoE will prepare an annual budget and a Procurement Plan for the current year of the project and will submit to the World Bank for No Objection (see Chapter 5). Step 4: Disbursements. After Signature, authenticated specimen signatures will be sent to the Bank’s lawyer through the WB TTL. Disbursements can be initiated after Effectiveness and executed after the total Project Budget and Procurement Plan have received the No-Objection from the WB. The Government of Vanuatu “sends” the Withdrawal Application (Advance, Reimbursement, or Direct Payment) to the World Bank disbursement department in the Philippines (see Chapter 5). Please note that effectiveness for this project is conditional on the following conditions being satisfied, as outlined in the Grant Agreement:

(a) The Subsidy Implementation Agreement executed by the Recipient and the Service Providers; (b) A legal opinion from the Government of Vanuatu to the World Bank, and; (c) This adoption of this POM by the Recipient and Services Providers.

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CHAPTER 4: PROJECT IMPLEMENTATION ARRANGEMENT

4.1 Organizational Design

Considering the activities to be implemented and the processes to be followed, the project will be coordinated by the DoE. The Project’s implementation and operations will be handled by the DoE operating unit, while the project’s administration (fiduciary support), if needed, will be handled by the PMU). Diagrams 2.0 outline the organization of Project implementation.

2.0 Organizational Chart GPOBA Grid-Based Electricity Access

4.2 Implementation Responsibilities The DoE is responsible for managing project risks during project implementation, such operational, developmental, social, environmental, governance, reputational, and capacity/implementation, as appropriate, to the Project’s development effectiveness, as well as responsible for project budgeting, accounting, reporting and support in Procurement, Disbursements and Auditing. The Project Management Unit (PMU), created for the administration of the “Vanuatu Increasing Resilience to Climate Change and Natural Hazards” project, under the Ministry of Climate Change and Natural Disaster, of which the DoE is a new department, will provide the financial management and procurement for this project and be responsible for realizing the governmental accounting, payments, withdrawal applications and auditing.

Fiduciary/ PMU

World Bank Ministry of Finance

DOE

-Independent Verification

-ESMF (+ RPF) Implementation

UNELCO -Consumer Connections -Household wiring

VUI -Consumer Connections -Household wiring

Low Income Consumers -Port Vila, Tanna & Malekula concession areas

Low Income Consumers -Luganville concession area

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Organization Roles and Responsibilities

DoE Implementing Agency for the Vanuatu GPOBA Project. Conduct ESMF consultation. Supervise and monitor the Service Providers responsibilities under the Project and the ESMF and RPF. Report on progress and outcomes of the ESMF to the World Bank. Consider any project-related complaints brought to its attention that fall outside the jurisdiction of the Service Providers or URA. Appoint and thereafter maintain at all times during implementation of the project, an Independent Verification Agent to be responsible for verification of eligible project outputs.

PMU Provide Fiduciary and Procurement Support as needed Support for accounting, payments, withdrawal applications and auditing.

UNELCO and VUI (Service Providers)

Provide Service Connections to the grid and access to electricity to applicants who meet the eligibility conditions. Implement the procedures for environmental and social impact mitigation, and land access agreements, in accordance with this ESMF and RPF. Supervise Contractors’ implementation of the ESMF for Connections. Report progress and outcomes of project implementation to DoE; report on complaints and incidents as usual to URA, flagging complaints relating to any damages not agreed on during the connections under GPOBA; report on consumer upgrades within in stipulated period of 12 months except for the final year.

Contractors Work in accordance with the ESMF for Service Connections. Report incidents to UNELCO / VUI.

URA Record and manage any project-related complaints brought to it by beneficiaries of the subsidy or other members of the public. Report through DoE to the Bank on the nature and number of project related complaints, numbers resolved, and time and costs to arrive at resolution.

World Bank Monitor the implementation of the ESMF. Receive and comment on reports by DoE. Release funds to DoE and direct payment of OBA Subsidies to Service Providers.

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CHAPTER 5: PROJECT PROCESSES The processes listed below refer to the implementation procedures and are the joint responsibility of Department of Energy and the Project Management Unit acting as the Project Implementation Unit. 5.1 Planning and Budgeting

The project budget is under the control of the Department of Energy (DoE). The DoE with the inputs from the PMU will prepare an annual project’s budget every year during the implementation of the project and will send them to WB for No-Objection no later than 31 December of each year. Goods and consultant services need to comply with procurement rules of the World Bank and hence they are also listed in the Procurement Plan. Additional activities and Budget modifications require an amendment of the budget and the submission of the amended budget to the World Bank for No-Objection previous payment of any new expenditure as does any amendments to the procurement plan. The initial project Procurement Plan for project has been developed by the DoE and attached as Annex 6. Once the Grant Agreement is signed, the DoE will send a Budget to the World Bank for No-Objection.

Planning and Budgeting

Output In

charge of

Input required

from

To be delivered to

Frequency of Delivery

Annual Budget

DoE PMU in the

VMGD World Bank

TTL Once per year - by 31 December of each year

5.2 Procurement

All goods and consultants’ services required for the Project are to be financed out of the proceeds of the Grant and shall be procured in accordance with the requirements set forth in the grant agreement. The World Bank’s Procurement and Consultant Guidelines shall be followed for procurement of all contracts to be financed under the Grant. These guidelines are available in WB’s Procurement website: http://intranet.worldbank.org/WBSITE/INTRANET/OPERATIONS/INTPROCUREMENT/0,,contentMDK:20106499~menuPK:60000178~pagePK:60000209~piPK:60000211~theSitePK:278020,00.html

Only contracts included in the procurement plan cleared by WB may be processed; No contract can be initiated before the publication of the General Procurement Notice; No contract requiring WB Prior Review should be signed before WB no-objection is

obtained otherwise may be deemed ineligible and unable to be financed out of the grants funds.

What to do? Find out below!

General Procurement Notice (GPN) published once at the beginning of the project, prior to effectiveness.

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The GPN publication is obligatory, before initiating any procurement process. The Project team sends the final GPN version to the WB for information and publishes it in Client Connection. If not, the Project team requests the WB TTL to publish it in the Client Connection on behalf of the Project. The template to be used is available in WB’s Procurement website. http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,print:Y~isCURL:Y~contentMDK:20126171~menuPK:84283~pagePK:84269~piPK:60001558~theSitePK:84266~isCURL:Y,00.html

WB Prior Review Before initiating any procurement needing WB Prior Review, the Project team sends a formal request for no-objection to the WB TTL. The procurement processes subject of WB Prior Review can be found in the Procurement as Annex 3, or the subsequent approved Procurement Plan.

What do we do for WB Prior Review? Find out in Annex 3

Procurement Plan (once a year): The Procurement Plan will be annually prepared by the DoE, with inputs from the PMU, then adjusted, consolidated and sent to the WB by

December 31 of each year for No-Objection and to be published on the WB’s external website. The project Procurement Plan for the first 6 months of the project has been developed by the DoE and attached as Annex 6. Once the Grant Agreement is signed, the DoE will send this Budget to the World Bank for No-Objection. The Procurement Plan contains all contracts; even the ones that are not requiring WB Prior Review

6

and it can be updated at any time, subject of WB’s approval. The Procurement Plan should be prepared by procurement category: goods, services, consultants’ services, non-consulting services, incremental and, operating costs. The Procurement Plan sets forth those contracts which shall be subject to the WB Prior Review and Post review. How to proceed when dealing with the procurement of goods, and consultant services? During project’s implementation the following procurement processes can be handled as illustrated in Annex 3 for the following cases:

Hiring an individual consultant or firm; and

Procuring goods. The procurement process: The Project Coordinator will be actively involved in all major procurement steps, providing orientation and specific advice and the World Bank Procurement Specialist will provide orientation and close support to the DoE during all the procurement process steps. The procurement process will be carried out as follows:

1. Procurement Plan: The Project Coordinator, Procurement Specialist, or Project Assistant with the PMU designated procurement specialist for the Project will prepare and update the procurement plan in consultation with the World Bank;

2. Procurement Plan’s approval by the Bank: the Project Coordinator, Procurement Specialist or Project Assistant will send the consolidated procurement plan to the TTL;

3. All procurement has to be in accordance with the approved procurement plan;

6 More detailed information about the WB Prior and Post Review and procurement method thresholds recommended for the

project are indicated in the Project Paper and the Procurement Plan attached as annex 5 and 6 respectively.

26

4. Terms of Reference or Technical Specifications: Technical staff will prepare and send them to the WB;

5. Preparation of the Request for Quote: The PMU designated procurement specialist for the Project will prepare the bidding documents in consultation with the DoE and PMU.

Procurement

Output In

charge of

Input required

from

To be delivered to

Frequency of Delivery

Procurement Plan

DoE PMU in the

VMGD World Bank

TTL Once per year - by 31 December of each year

5.3 Project Financing and Disbursements Project’s activities will be financed with funds will be disbursed by the World Bank based on the following three disbursement categories in the Grant Agreement. Refer to Annex 4 Grant Agreement: 5.3.1 Flow of Funds The flow of funds design is simple. Funds will flow directly from the World Bank to a Designated Account established for the project under the Government of Vanuatu's Development Fund account and will be maintained in local currency (VUV) in the Central Treasury account, which will be managed by the Minister of Finance and Economic Management (MoFEM). The DoE will then pay for project expenditures under Component 3 directly from the DA, using the national financial information technology system “Smartstream Financial”. The chart below represents the flow of funds design as agreed during negotiations, inclusive of Advance, Direct Payment and Reimbursements. Flow of funds (Advances, Reimbursements, or Direct Payments)

Flow of information, including: Final Payment Requests, Withdrawal Application Requests/Documentation of Expenses

World Bank

Project Account

Service Providers & Providers of goods, works, non-consulting services,

consultant’s services, training and workshops (all inclusive of taxes)

DoE/PMU

Final Payments (in Vatu)

Designated Account

Vanuatu Reserve Bank - MoFEM

Direct Payments

(In foreign currencies or Vatu)

Advances & Reimbursements

made in Vatu

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5.3.2 Disbursements Methods Before any disbursement request is sent to the WB, specimen signatures of the authorized signatories will be sent to the WB (TTL). All the disbursements procedures can be found in the Disbursements Letter (DL) attached as Annex 7.

The project will use Advances, Reimbursements and Direct Payments as methods of disbursements. The Minimum Value of Applications for Direct Payment and Reimbursement is USD 20,000 equivalent according to the follow procedures:

For the Advances of grant proceeds, a Withdrawal Application (WA) with an advance request will be prepared by the Department of Energy and signed by the relevant Authorized Signatories before being sent to the WB by DoE. The funds will be deposited to the Project’s Designated Account

(DA) at the Vanuatu Reserve Bank Account number 30108004 bank in Vatu (VUV). The ceiling for the DA, established in the Disbursements Letter, is VUV 10,000,000.00 The DA account is replenished through a new WA, reporting on use of grant proceeds, as explained in Attachment 4 of the Disbursements Letter (DL); there is no minimum value of applications for advances to the DA.

For Reimbursements of expenditures paid out of local funds during project implementation, a Withdrawal Application will be prepared, which will be accompanied by the various supporting documentation as detailed in the DL.

For a payment to be realized through a Direct Payment, a Withdrawal Application will be prepared. This will be accompanied by (i) an invoice from the Service Provider and (ii) statement of output based subsidies (Attachment 4A of the DL) and (iii) an acceptable Output Verification Report (example shown in Annex 7) from the Independent Verification Agent (IVA), adequately approved by the Project teams, according to the Disbursement Letter. 5.3.3 Disbursement Schedule for Subsidy Payment Grant funds related to OBA Subsidy payment will be contingent upon output verification by the IVA actioned within 22 business days or 1 calendar month of receiving each claim for reimbursement from each Service Provider and certified by the IVA. OVR will be triggered by Claim for OBA Subsidy (invoice submission) from the Service Provider, submitted once non-reimbursed connection costs have reached VUV 3 million or at least once every three months. The DoE will prepare and submit a withdrawal application to the World Bank for payment of OBA Subsidies to the Service Providers. The process for payment for OBA Subsidies is outlined in Section 1.7 and the payment schedule for postpaid and prepaid Service Connections and Household Wiring is outlined in Section 1.5.5. and following. The Payment schedule for Prepaid connections: The OBA Subsidy will be paid in one payment as follows:

Subsidy Payment/ Installment

Size Criteria

First 100% of OBA Subsidy for Household wiring. + 100% of OBA Subsidy for Service Connection. - 100% of OBA Subsidy for Service Connections and Household Wiring subsequently determined ineligible for an OBA Subsidy.

OVR from IVA against the verification criteria

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The Payment schedule for Postpaid connections: The OBA Subsidy will be paid in two tranches as follows

Subsidy Payment/ Installment

Size Criteria

First 100% of OBA Subsidy for Household wiring. + 80% of OBA Subsidy for Service Connection. - 100% of OBA Subsidy for Service Connection and Household Wiring subsequently determined ineligible for an OBA Subsidy.

OVR from IVA against the verification criteria

Second 20% of OBA Subsidy for Service Connection. - 100% of OBA Subsidy for Service Connection and Household Wiring subsequently determined ineligible for an OBA Subsidy

Against invoice and acceptable OVR from IVA that at least 80% of the new postpaid connections are still active

7 after 3 months, in

which case the remaining 20% of the OBA Subsidy will be paid in full for all connections, In the event that less than 80% of these connections are active, the remaining 20% of the OBA Subsidy will be paid on a proportional basis calculated as: the number of active after 3 months/ total connections made under a given claim multiplied by funds outstanding.

5.4 Financial Management The DoE, with support from the PMU, will (i) maintain a financial management system, in accordance with the provisions of the Grant Agreement and Section 2.07 of the Standard Conditions, (ii) ensure that interim unaudited financial reports (IFR) for the Project are prepared and furnished to the World Bank not later than forty five (45) days after the end of each semester, covering the semester, in form and substance satisfactory to the World Bank (an IFR agreed version is in the Budget and reporting template and, (iii) have the Project Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Each such audit of the Project Financial Statements shall cover the period of one fiscal year of the Recipient. The Recipient (MoFEM) or the DoE shall ensure that the audited Project Financial Statements for each such period will be furnished to the World Bank not later than six months after the end of each fiscal year. 5.5 Accounting The accounting arrangements of the project are the following:

The Government of Vanuatu accounts are held on a cash basis and it is expected project accounts will also be on a cash basis. PIU or PMU prepares documentation for transactions and the inputting and payment of accounts for Component 3 and Component 4 through Smartstream Financial.

Recording of all transactions/payments made by the PMU for Component 3 will be done in the Smartstream Financial, while for Components 1 & 2 will be through extra-accounting

7 An “active” connection refers to one that has not been disconnected from the utility service for non-payment only. For

clarification, a Service Connection that has been disabled for any other reason, such as consumer relocation, safety etc. will not be counted a non-active connection.

29

registration in Smartstream Financial or a spreadsheet (in this case for the three Components) by the Project Coordinator, or by a Project Assistant;

Preparation of all documentation for payments and Withdrawal Applications by the Project Coordinator or Project Assistant and maintenance of a filing system to enable easy retrieval of information;

Maintain a commitments register to monitor the contractual agreements and to enable the identification of the total balance of project commitments (unpaid contract amounts);

Transmission of the above to the DoE Project Financial Management Specialist for review and payments, or forwarding to the WB for the Direct Payments, Reimbursements and/or Advances.

5.6 Archiving All project documentation of expenses will be securely archived at DoE.

All project documentation (including procurement, accounting and reporting) will be archived and available for any WB request for at least two years after project Closing by the Project Coordinator or one year after WB has received the audited Financial Statements covering the period during which the last withdrawal from the Grant Account was made (whichever is the later).

5.7 Assets Register

The Project Coordinator or Project Assistant at DoE is responsible for managing the records management of project assets and ensuring they are maintained and used appropriately. DoE will maintain an Asset Register for all non-consumable items purchased with Grants funds. The register is used to monitor and control the use and location of assets. The following table provides some suggestions for the record management of project assets to be done by the Project Coordinator or Project Assistant: Procedure to Establish & Maintain an Asset Register

1 Record all purchases and allocate number at time of receipt and number of procurement/payment process

2 Determine if insurance required, and arrange cover

3 File warranties, guarantees and original instruction manuals

4 Label asset (with label or permanent marker)

5 Prepare photo image or scanned backup regularly

6 Include an updated Asset Register in reports such as the six-monthly, and Implementation Completion Report

5.8 Project Termination and Closure

Termination: The project may be terminated if the World Bank has not received the countersigned Grant Agreement within 90 days of signature by the World Bank. It may also be terminated if effectiveness conditions are not satisfied within 90 days of countersignature of the Grant Agreement.

Termination: The Subsidy Implementation Agreements between the Recipient and the Service Providers (UNELCO and VUI) shall terminate on the earlier of either (a) the Project Closing Date of June 30, 2018; or (b) when the amount allocated to Category (2) of the withdrawal table in the Grant Agreement has been fully disbursed.

30

The Recipient shall inform the Service Providers in writing when the disbursement of OBA Subsidy in aggregate is within 10% of funds allocations for OBA Subsidies under Category (2) of the Grant Agreement (Annex 4) and jointly review the monthly work plan referred to in clause 9.1 of the Subsidy Implementation Agreements with each services provider to ensure the future claims for OBA Subsidy in aggregate will not exceed available funds.

Closure: (June 30, 2018): All goods, services and consultant services and the related

bills/invoices should be finalized / received by the Project.

Application Deadline or Grace Period:(4 months after closing): Payments to the providers and documentation of expenses to the Bank can continue for four months after closing, only for the payment of expenses incurred before the closing date. After this period, any reported/ documented expenditure will be considered ineligible. Any funds used for ineligible expenditures will be reimbursed to the WB (the WB will send banking arrangements). DoE sends Withdrawal Applications to the WB in Manila, Philippines.

5.9 Good Governance - Fraud detection The World Bank has zero tolerance for corruption, and instances of suspected fraud or corrupt behaviour are required to be reported to the World Bank. 5.10 Project Monitoring Project monitoring and evaluation will be conducted on the basis of the agreed key monitoring indicators shown in Annex 9.

The Bank will provide implementation support for the project on an on-going basis and visit Vanuatu semi-annually to monitor and evaluate progress. Regular audio or video meetings will take place to follow up on implementation. 5.11 Role of the World Bank during implementation Overall Project Implementation Support of the Project will be done by the World Bank (WB), through its Task Team Leader (TTL) and the Task Team (TT). The TTL will provide guidance to the DoE on all implementation issues and is also responsible for issuing the required "no objections" or facilitating such clearance through the WB’s Procurement Specialist. Apart from supervision of the Project, the WB’s role, through the TTL, is to ensure that all grant funds are spent and executed in accordance with the Standard Conditions, Grant Agreement and the related procurement, disbursement and other project implementation guidelines. Procurement post reviews are carried out on transactions not subject to prior review, in accordance with Appendix 1 of the Procurement and Consultant Guidelines. The WB may provide further guidance to facilitate implementation, both from an administrative and technical point of view. Specific support will be provided by the WB on Financial Management, Disbursements, and Procurement. During Project Implementation Support missions, issues related to project implementation will be discussed and, to the extent possible, resolved. A key parameter to be assessed during the supervision will be progress towards achieving the Project's developmental objectives. In the rating system applied by the WB to assess overall success of the Project, specific reference is made to this as well as to general implementation progress. Project Implementation Support missions will rely on the Project's own monitoring and reporting to assist with the assessment. It is a good practice for the DoE to prepare a brief summary of project implementation progress and issues by component to assist in focusing attention during the mission.

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ANNEX 1: STAFFING

Day-to-day Human Resource Management (HRM) administration of the Team will fall under the responsibility of the DoE. Other HRM tasks include logistics, Terms of Reference (TOR) for staff and technical specialists, performance appraisals, a timely resolution of personnel-related concerns and recruitment of replacement personnel, according to the Government of Vanuatu legislation. The roles and responsibilities for the positions identified below will be finalized within one month of effectiveness (1

st August, 2014).

The key Project Team consists of the following:

Role Responsibility Reports to

Project Coordinator/ Director of DoE

Charged with day-to-day management of the project will directly liaise with the WB’s Task Team, including the following tasks:

Managing project;

Managing project sources for implementation purposes as specified in legal agreement;

Controlling project accounts;

Representing the project and acting on its behalf;

Coordinating the Procurement processes;

Providing guidance to the Project Assistant on procurement processes as required;

Processing all the procurement activities up to signing of contracts.

DG of Climate Change

Project Assistant/ On-grid Specialist of DoE

Charged with day-to-day facilitation of the project, including the following tasks:

Developing financial planning and accounting system, including selection of appropriate accounting software.

Preparing the Procurement Plans and processes in consultation with the WB Procurement Specialist sitting inside the PMU;

Preparing and processing of payments to suppliers, contractors and consultants as specified in contracts;

Preparing withdrawal applications for drawing funds from grant accounts in coordination with the FM Specialist sitting inside the PMU;

Keeping up-to-date and accurate project accounts;

Carrying out financial performance review of project activities, in accordance with the Bank requirements and in coordination with the FM Specialist of the PMU;

Liaising with the Ministry of Finance and other budgetary agencies in Vanuatu, as well as with commercial banks holding project accounts;

Providing administrative support to the Team and Project;

Maintaining complete and current archives and project document files

Project Coordinator Director of DoE

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ANNEX 2: PROCUREMENT PROCESSES EXAMPLES & WORLD BANK PRIOR REVIEW RELATING TO THE PROJECT IMPLEMENTATION UNIT

A.2.1. Shopping For Goods and Works

A.2.2. Selection of a firm based on Consultants’ Qualification (CQS)

A.2.3. Selection of Individual Consultants (IC)

A.2.4. World Bank Prior Review

Attachment 1 Form of Quotation

Attachment 2 Procurement of Goods under Shopping Evaluation Form

Attachment 3 Sample Format for Request of Expressions of Interest (Consultant Services)

Attachment 4 Evaluation Report on Qualifications and Experience of Consultants for Selection Based

On Consultant’s Qualifications (CQS)

Attachment 5 Request For Proposals – Selecting A Firm Through CQS

Attachment 6 Selection of Individual Consultants for Advisory Services

Attachment 7 Evaluation Report - Selection of Consulting Services, Individual Consultant

Attachment 8 Sample Contract for Small Assignments Time-Based Payments

Attachment 9 Sample Contract for Small Assignments Lump-Sum Payments

A.2.1 PROCESS FLOW FOR PROCUREMENT OF GOODS in the case of “Shopping” This method is generally used for readily available off-the-shelf goods or standard specification commodities. The use of this method will be governed by pre-determined thresholds reflected in the Procurement Plan. Quotations should be obtained from several suppliers. Quotations from a minimum of three suppliers/contractors should be obtained, unless local market size or conditions make it impossible, or very difficult. Invitation To Quote (ITQ) may be sent to suppliers by letter, fax or email, and quotations can be submitted using any of these communication means.

Remember! Check the procurement method in the procurement plan (and in the Grant Agreement), depending on value of the contract. Wait for WB no-objection, if needed. Then what?

Steps to be followed:

Nominate a procurement decision committee of three members (preferably, no more than five); if the project is implemented by a PIE/PMU, its procurement officer should be included in the committee, whenever possible.

Agree on the list of required items of goods (including quantities); try to group the same type of or similar Goods under specific Lots into a single procurement package.

Prepare technical specifications without using brand names, or copy- pasting from technical specifications of proprietary Goods. Use performance based rather than prescriptive specifications;

33

Prepare list of suppliers broad enough to generate good competition and, where possible, to yield at least three quotations. This list may be prepared based on past experience, consultation with chambers of commerce, Internet, or direct market research;

Prepare Invitation to Quote (ITQ) using samples in Attachment 1 for Goods;

Send the ITQ to the suppliers; allow minimum 7 days for submission of ITQ (a shorter period – 3 days – may be allowed for very small contracts, or in case of emergencies.)

If unable to obtain at least three quotations, provide justification to the Bank and obtain no objection before proceeding with the only responses already received.

Receive quotations by deadline, and evaluate them (shopping can be by e-mail, fax, or other methods, as applicable locally, not requiring sealed envelopes.)

Prepare an evaluation report using Attachment 2 for Goods a making a recommendation for award of the contract and after verifying that the firm recommended meets eligibility requirements including the Bank’s Sanction Policy

Formalize approval and maintain original signed report in procurement files.

Sign the contract and maintain the original signed copy in procurement file. Keep the process confidential until the contract has been awarded;

Publish contract award information (the name of the selected supplier/contractor, the contract price) on an appropriate website or on a widely used electronic portal of the agency with free access. Receive and inspect goods and make payments as per the purchase order preferably through bank transfer or if not available by cash against a signed receipt; and

Keep all related documents on file. A.2.2 PROCESS FLOW FOR SELECTION OF CONSULTANTS In the case of selection of firms for consulting services, the Bank Guidelines for Selection and Employment of Consultants (Jan. 2011) should be consulted. The methods used for the project would be Consultant Qualification Selection (CQS) and Individual Consultant Selection (ICS). A.2.2.1 Selection Of A Firm Based On Consultant’s Qualification (CQS)

Steps to be followed (selection process to be completed within 90 days):

Establish a selection committee of at least three members, but not more than five members;

Prepare draft terms of reference (TOR), including the budget estimate in terms of person/days (weeks, months, whatever is applicable), assignment duration, etc.,

Establish evaluation criteria including parameters such as specific experience, methodology, key experts, participation of national experts and transfer of knowledge (if necessary);

Request electronically expressions of interest (Attachment 3) and qualification information on the consultants’ experience and competence relevant to the assignment, preferably through advertisement on an appropriate website or on a widely used electronic portal of the agency with free access, and through dissemination of information about the assignment to professional associations, and sending the advertised RFEOI text to the consultant firms already available in the PIE/PMU register etc.;

If necessary, seek via email additional information/clarification from interested candidates;

Establish through evaluation ranking of the firms which expressed interest using the forms in Attachment 4;

Prepare an Evaluation Report for approval by the selection committee using the forms in Attachment 4, including individual evaluation form and the summary of individual evaluation forms;

Select the top-ranking firm with the best qualifications and references;

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Prepare the Request for Proposal using sample in Attachment 5;

Send the Request for Proposal only to the selected highest-ranked firm to submit technical and financial proposals for the assignment, in accordance with the terms of reference; allow not less than four weeks depending the type of assignment.

Review the proposals and prepare for negotiations;

Selection committee negotiates the contract (See Attachments 8, 9 for Standard Forms of Contract) with the firm and prepare minutes of negotiation as per the attachment (no one-to-one negotiations); Verify if the firm meets below referred requirements for Eligibility (Clause II.5) , Hiring of Government Agencies, Universities ,Research Institutes and officials ( Clause II.6 and II.7 ) and Bank’s Sanction Policies( Clause II.8)

Sign the contract;

Keep the process confidential until contract signature;

Publish contract award information (the name of the selected firm) on an appropriate website or on a widely used electronic portal of the agency with free access; and

Keep all documents on file.

A.2.3 Selection of Individual Consultant (ICS)

Steps to be followed (selection process to be completed within sixty days):

Prepare draft terms of reference, including the budget estimate in terms of person/days (weeks, months, whatever is applicable), assignment duration, etc.,

Establish evaluation criteria;

Seek expression of interest electronically and/or hand or postal delivery from individual consultants preferably through advertisement on an appropriate website or on a widely used electronic portal of the agency with free access, and, if feasible, disseminate information to professional associations, etc; and inviting individual consultants specific for the required assignment listed in the register/archive of the PIE/PMU from previous advertisements and personal applications.

Request further information/clarification on references and qualifications where required and useful to determine if a candidate is qualified and should be shortlisted;

Based on the expression of interests (and additional information/clarification) received, prepare a list of a minimum of three candidates, based on their relevant experience in the field of assignment (i.e. the list should not include candidates who don't have experience/qualifications in the relevant field of assignment, or who may not fulfil any minimum experience/qualifications, etc., if so required in the request for expression of interests);

Send through e-mail the terms of reference to the short listed individual consultants and request them for their CV in the same format as Attachment 5;

If candidates have submitted their CVs as part of their expression of interest, simply send the terms of reference and ask the candidates to confirm their candidature for the assignment;

Establish a small evaluation committee comprising at least three members but not more than five members;

Evaluate the CVs based on the criteria set up beforehand;

If the number of qualified candidates are less than three and not available to compare, obtain the Bank’s No Objection before proceeding the selection process, Verify if each of the short listed candidates meets below referred requirements for Eligibility (Clause II.5), Hiring of Government Agencies, Universities , Research Institutes officials ( Clause II.6 and II.7 ) and Bank’s Sanction Policies( Clause II.8)

Interview the first ranked candidate before hiring following the evaluation methodology, and document the results properly in the evaluation report (i.e., how many candidates were interviewed, what were the results, etc?);

Prepare evaluation report using the form in Attachment 7; (Note: if not subject to Bank’s prior review, skip the next two steps).

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If subject to Bank’s prior review, submit the evaluation report to the Bank;

After Bank’s agreement, negotiate contract (See Attachments 8 and 9 for Standard Forms of Contract) with the selected consultant via email, fax or on the phone;

Negotiate contract with the selected consultant via email, fax or on the phone

In case the negotiations with the selected individual fail, obtain the Bank’s no objection before proceeding to negotiate with the next best individual,

Sign the contract;

Keep the process confidential until contract is awarded;

Publish the contract award information on a widely used electronic portal of the agency with free access

Inform all candidates of the outcome of the selection process;

Supervise the consultant’s performance; and

Ensure that payments are made against agreed deliverables/outputs

A.2.4 WB PRIOR REVIEW Refer Appendix 1 of the WB Consultant and Procurement Guidelines For Hiring an Individual Consultant The Project team sends to the WB the following documentation for prior review:

Terms of Reference – TORs (already cleared by TTL), advertisement for expressions of interest, and cost estimate for the services

Selection and Evaluation Report (including CVs of the shortlisted consultants)

Draft Negotiated contract (before signing) For Goods and Works (Shopping) – First 2 transactions under shopping are subject to prior review. The Project team sends to the WB the following documentation for prior review:

Invitation to quote, and cost estimate

Quotation Evaluation Report After receiving the WB ‘no objection’ to the award recommendations in the Bid Evaluation Report, the Project team sends to the WB a copy of the Signed Contract, and publishes the contract award information.

36

Attachment 1 Invitation to Quote (ITQ) - Shopping For Goods Project Title: ___________________ Date: ________________ Source of Funding: _______________ Contract Ref: ___________________ To: ________________________ Dear Supplier, 1. You are invited to submit your price quotation(s) for the supply of the following items:

i. ___________________________________________ ii. ___________________________________________ iii. ___________________________________________ iv. ___________________________________________

Information on technical specifications and required quantities are attached. 2. You may quote for;

i. any or more items under this invitation. Each item shall be evaluated and contract awarded separately to the firm(s) offering the lowest evaluated price for each item or

ii. you must quote for all the items under this Invitation. Price quotations will be evaluated for all

the items together and contract awarded to the firm offering the lowest evaluated total cost of all the items.

(Note: The Purchaser must select one of the two options and delete the non-applicable option) 3. Your price quotation in the form attached may be submitted by hand delivery, surface mail, courier service and facsimile or electronically at the following address: ______________________________ (Purchaser’s Address) _______________________________ _______________________________ __________________________________________________________ Telephone: __________________ Fax: e-mail address:__________________ 4. The deadline for receipt of your quotation (s) by the Purchaser at the addresses indicated in above Paragraph 3 is:………………. (insert the date of submission deadline- Normally not less than 7 days from the invitation date.) 5. Your quotation in duplicate and in …………. (insert language) language, should be accompanied by adequate technical documentation and catalogue(s) and other printed material or pertinent information (in ………. language if available otherwise in English ) for each item quoted, including names and addresses of firms providing service facilities in ………….. (insert country) 6. Your quotation(s) should be submitted as per the following instructions and in accordance with the attached Contract. The attached Terms and Conditions of Supply is an integral part of the Contract.

(i) PRICES: The prices should be quoted in …………………… (insert currency)for the total cost at final destination (insert place of destination which includes all taxes, VAT, custom

37

duties and taxes, inland transportation, insurance, loading and unloading domestically supplied goods plus the price of delivery to the place of destination,

(ii) EVALUATION OF QUOTATIONS: Offers determined to be substantially responsive to the technical specifications will be evaluated by comparison of the total price at final destination as para 2 above. In evaluating the quotations, the Purchaser will determine for each bid the evaluated price by adjusting the price quotation by making any correction for any arithmetical errors as follows:

a) where there is a discrepancy between amounts in figures and in words, the amount in words will govern;

b) where there is a discrepancy between the unit rate and the line item total resulting from multiplying the unit rate by the quantity, the unit rate as quoted will govern;

c) if a Supplier refuses to accept the correction, his quotation will be rejected. (iii) AWARD OF CONTRACT/PURCHASE ORDER: The award will be made to the bidder offering the lowest evaluated price and that substantially meets the required standards of technical and financial capabilities. The successful bidder will sign a Contract as per attached form of contract and terms and conditions of supply.

(iv) VALIDITY OF THE OFFER: Your quotation(s) should be valid for a period of forty five (45) days from the deadline for receipt of quotation(s) indicated in Paragraph 4 of this Invitation to Quote.

7. Further information can be obtained from: _(insert the full address of the Purchaser)_______________________________ ________________________________ Name of contact person: Telephone: _____________________ Fax: _________________________ E-mail: ________________________ 8. Inspections and Audits

8.1 The Supplier shall carry out all instructions of the Purchaser, which comply with the applicable laws where the destination is located.

8.2 The Supplier shall permit, and shall cause its Subcontractors and consultants to permit, the Bank and/or persons appointed by the Bank to inspect the Supplier’s offices and all accounts and records relating to the performance of the Contract and the submission of the bid, and to have such accounts and records audited by auditors appointed by the Bank if requested by the Bank. The Supplier’s and its Subcontractors and consultants’ attention is drawn to Clause 5 Fraud and Corruption of the Form of Contract, which provides, inter alia, that acts intended to materially impede the exercise of the Bank’s inspection and audit rights constitute a prohibited practice subject to contract termination (as well as to a determination of ineligibility pursuant to the Bank’s prevailing sanctions procedures). 9. Please confirm by fax/e-mail the receipt of this invitation and whether or not you will submit the price quotation(s).

Sincerely, Name and title of the Puchaser’s authorized person

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Form Of Contract (Shopping-Goods) THIS AGREEMENT number _____ made on __(day)__, _(month)_ , __(year)__ between _____________________________ (hereinafter called “the Purchaser”) on the one part and ______________________________________ (hereinafter called “the Supplier”) on the other part.

WHEREAS the Purchaser has invited quotation for ______________(description of goods) to be supplied by Supplier, viz. Contract _____, (hereinafter called “Contract”) and has accepted the Bid by the Supplier for the supply of goods under Contract at the sum of __________ (___________________________) hereinafter called “the Contract Price”.

NOW THIS AGREEMENT WITNESSETHES as follows:

1. The following documents shall be deemed to form and be read and construed as part of this agreement, viz:

a) Invitation to Quote; Term and Conditions of Supply, Technical Specification;

b) Addendum (if applicable);

2. Taking into account payments to be made by the Purchaser to the Supplier as hereinafter mentioned, the Supplier hereby concludes an Agreement with the Purchaser to execute and complete the supply of Contract and remedy any defects therein in conformity with the provisions of Contract.

3. The Purchaser hereby covenants to pay in consideration of the goods supply and acceptance of Contract and remedying of defects therein, the Contract Price in accordance with Payment Conditions prescribed by Contract.

Termination 4.1 Termination for Default

a) The Purchaser, without prejudice to any other remedy for breach of Contract, by written notice of default sent to the Supplier, may terminate the Contract in whole or in part:

i. if the Supplier fails to deliver any or all of the Goods within the period specified in the Contract, or within any extension thereof granted.

ii. if the Supplier fails to perform any other obligation under the Contract; or iii. if the Supplier, in the judgment of the Purchaser has engaged in fraud and

corruption, as defined in Clause 5 below, in competing for or in executing the Contract.

b) In the event the Purchaser terminates the Contract in whole or in part, the Purchaser may procure, upon such terms and in such manner as it deems appropriate, Goods or Related Services similar to those undelivered or not performed and the Supplier shall be liable to the Purchaser for any additional costs for such similar Goods or Related Services. However, the Supplier shall continue performance of the Contract to the extent not terminated.

4.2 Termination for Insolvency.

a) The Purchaser may at any time terminate the Contract by giving notice to the Supplier if the Supplier becomes bankrupt or otherwise insolvent. In such event, termination will be without compensation to the Supplier, provided that such termination will not prejudice or affect any right of action or remedy that has accrued or will accrue thereafter to the Purchaser.

4.3 Termination for Convenience.

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a) The Purchaser, by notice sent to the Supplier, may terminate the Contract, in whole or in part, at any time for its convenience. The notice of termination shall specify that termination is for the Purchaser’s convenience, the extent to which performance of the Supplier under the Contract is terminated, and the date upon which such termination becomes effective.

b) The Goods that are complete and ready for shipment within twenty-eight (28) days after the Supplier’s receipt of notice of termination shall be accepted by the Purchaser at the Contract terms and prices. For the remaining Goods, the Purchaser may elect:

(i) to have any portion completed and delivered at the Contract terms and prices; and/or

(ii) to cancel the remainder and pay to the Supplier an agreed amount for partially completed Goods and Related Services and for materials and parts previously procured by the Supplier

Fraud and Corruption 4. If the Purchaser determines that the Supplier and/or any of its personnel, or its agents, or its

Subcontractors, consultants, service providers, suppliers and/or their employees has engaged in corrupt, fraudulent, collusive, coercive or obstructive practices (as defined in the prevailing Bank’s sanctions procedures), in competing for or in executing the Contract, then the Purchaser may, after giving 14 days’ notice to the Supplier, terminate the Supplier's employment under the Contract and cancel the contract, and the provisions of Clause 4 shall apply as if such expulsion had been made under Sub-Clause 4.1.

Inspections and Audits 6.1 The Supplier shall carry out all instructions of the Purchaser which comply with the applicable laws where the destination is located The Supplier shall permit, and shall cause its Subcontractors and consultants to permit, the Bank and/or persons appointed by the Bank to inspect the Supplier’s offices and all accounts and records relating to the performance of the Contract and the submission of the bid, and to have such accounts and records audited by auditors appointed by the Bank if requested by the Bank. The Supplier’s and its Subcontractors and consultants’ attention is drawn to Clause 5 Fraud and Corruption, which provides, inter alia, that acts intended to materially impede the exercise of the Bank’s inspection and audit rights constitute a prohibited practice subject to contract termination (as well as to a determination of ineligibility pursuant to the Bank’s prevailing sanctions procedures).

Signature and seal of the Purchaser: FOR AND ON BEHALF OF _______________________ Name of Authorized Representative

Signature and seal of the Suppler: FOR AND ON BEHALF OF ____________________________ Name of Authorized Representative

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Terms And Conditions Of Supply (Shopping-Goods) Project Name: _______________________Purchaser:_______________________________ Consignee: _______________________Package No. ____________________________ 1. Prices and Schedules for Supply

Sl.No. Item No

Description of Goods

Quantity Unit Price

Total Price at final destination (includes all taxes, VAT, customs, duties, inland transportation and insurance)

Delivery Date

(Note: In case of discrepancy between unit price and total derived from unit price, the unit price shall prevail)

2. Fixed Price: The prices indicated above are firm and fixed and not subject to any adjustment

during contract performance. 3. The Purchaser reserves the right at the time of contract finalization to increase by up to 15%

the quantity of goods and services originally specified without any change in unit prices as well as other terms and conditions.

4. Delivery Schedule: The delivery should be completed as per above schedule but not

exceeding ______ calendar days from contract signature.

5. Insurance: The supplier is responsible for all kinds of insurance until the goods delivered and installed (if applicable) to the address of the Purchaser. For the readily available goods in the coutry of Purchase, the Purchaser will not assume any responsibility until goods are delivered and installed to the final place of destination. In case of goods supplied from abroad specifically for this Contract; the Goods supplied shall be fully insured in a freely convertible currency against loss of damage incidental to manufacture or acquisition, transportation, storage and delivery. The insurance shall be in an amount equal to 110 percent of the total value of the Goods from «Warehouse» to «Warehouse» on «All risks» basis, including «War Risks». The Supplier shall arrange and pay for cargo insurance, naming the Purchaser as the beneficiary.

6. Applicable Law: The Contract shall be interpreted in accordance with the laws of the ................. (insert country)

7. Resolution of Disputes: The Purchaser and the Supplier shall make every effort to resolve

amicably by direct informal negotiation any disagreement or dispute between them under or in connection with the Contract. In the case of a dispute between the Purchaser and the Supplier, the dispute shall be settled in accordance with the country procedures of the Purchasers country. The dispute shall be referred to jurisdiction at the Courts of ….. (insert the name of the city where the implementing agency prefers the location of the authorized courts )

8. Delivery and Documents: Upon shipment, the Supplier shall notify the Purchaser and the

Insurance Company by cable of fax the full details of shipment, including purchase order number, description of goods, quantity, the vessel, the Shipping and Forwarding Receipt from freight Company showing full details, port of loading, date of shipment, port of discharge, etc.

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The Supplier shall mail the following documents to the Purchaser, with a copy to the Insurance Company: (i) Copies of the Supplier’s invoice showing goods’ description, quantity, unit price, and

total amount; (ii) Duplicate air/ truck transport document and/ or duplicate of railway transport

document, and/or duplicate FCR (Forwarders Certificate of Receipt) in 1 Original and 2 Copies marked «freight prepaid»;

(iii) Copies of the packing list identifying contents of each package; (iv) Manufacturer’s or supplier's warranty certificate; (v) Certificate of origin; (vi) Certificate of quality.

The above documents shall be received by the Purchaser at least one week before arrival of the goods at the port of place of arrival and, if not received, the Supplier shall be responsible for any consequent expenses.

9. Payment for your invoice will be made as follows: i. If goods are provided from a readily available market in ………. (insert country): 100%

against receipt of goods and issue of Acceptance Certificate for respective deliveryby the Purchaser. Payment shall be made by bank transfer to the account of the supplier. In case of very small amounts and non-availability of Bank facilities in remote areas, payment may be made in cash to the purchaser against a receipt.

ii. If goods supplied from abroad specifically for this Contract: [100% against delivery of shipping documents, through an irrevocable and Confirmed Letter of Credit, opened by __________________(name of the Bank in Purchaser’s country) in favor of the _______________________(Supplier’s Bank)], or [payment will be made 100% on acceptance of the goods] or [Advance payment of 10% of the Contract price paid within thirty (30) days of signing the contract against a simple receipt and a bank guarantee for the equivalent amount; 80% of the contract price on Shipment of goods and the remaining 10% of the contract price paid within thirty (30) days after the date of the Acceptance Certificate for the respective delivery issued by the Purchaser [chose one option and delete the others].

10. Warranty: Goods offered should be covered by manufacturer’s warranty for at least 12 months

from the date of delivery to the Purchaser. Please specify warranty period and terms in detail. 11. Packaging and Marking Instructions: The Supplier shall provide standard packing of the

Goods as required to prevent their damage or deterioration during transit to their final destination, as indicated in the Contract.

12. Defects: All defects will be corrected by the Supplier without any cost to the Purchaser within

30 day from the date of notice by Purchaser. Name and address of service facility which the defects are to be corrected by the supplier within the warranty period:

Address _______________ _______________ 13. Force-Majeure: The supplier shall not be liable for penalties or termination for default if and to

the extent that its delay in performance or other failure to perform its obligations under the Contract is the result of an event of Force-Majeure.

For purposes of this clause, “Force-Majeure” means an events beyond the control of the

Supplier and not involving the Supplier’s fault or negligence and not foreseeable. Such events may include, but not restricted to, act of Purchaser in its sovereign capacity, wars or revolutions, fires, floods, epidemics, quarantine restrictions, and freight embargoes.

If a Force-Majeure situation arises, the Supplier shall promptly notify the purchaser in writing

of such condition and the cause thereof. Unless otherwise directed by the Purchaser in writing, the Supplier shall continue to perform its obligations under the Contract as far as is reasonably practical, and shall seek all reasonable alternative means for performance not prevented by Force-Majeure event.

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14. Required Technical Specifications (i) General Description (ii) Specific details and technical standards (iii) Performance Parameters

Supplier confirms compliance with above specifications (In case of deviations supplier to list all such deviations).

15. Failure to Perform: The Purchaser may cancel the Agreement if the Supplier fails to deliver

the Goods, in accordance with the above terms and conditions, in spite of a 21 day notice given by the Purchaser, without incurring any liability to the Supplier.

NAME OF SUPPLIER________________________________________________ Authorized Signature________________________________________ Place: Date:

43

Form of Quotation (Shopping-Goods) ________(Date) To:_______________________________ (Purchaser’s Name) _______________________________ (Purchaser’s Address) _______________________________ We offer to execute the___________________________________________(Purchaser to fill name and number of Contract) in accordance with the Conditions of Contract accompanying this Quotation for the Contract Price of _________________________(amount in words and numbers) (______________) (name of currency). We propose to complete the delivery of Goods described in the Contract within a period of ___________________calendar days from the Date of Signing of the Contract. This Quotation and your written acceptance will constitute a binding Contract between us. We understand that you are not bound to accept the lowest or any Quotation you receive. We hereby confirm that this Quotation complies with the Validity of the Quotation required by the proposal documents. Authorized Signature:______________________________________ Name and Title of Signatory_________________________________ _________________________________ Name of Supplier:_______________________________________ Address: _______________________________________ _______________________________________ Phone Number ___________________ Fax Number, if any ___________________ e-mail address: -----------------------------------

44

Attachment 2 Procurement of Goods Under Shopping Evaluation Form 1. Project Name __________________________________________ 2. Implementing Agency __________________________________________ 3. Details of goods __________________________________________ procured __________________________________________ 4. Estimated Cost (Loc. Cur.) _____________Equivalent

USD_________________

5. Quotations Submission _____________time allowed (days)___________ Submission Deadline _____________(date)______________________

6. Bidders Invited Bidders Quoted Quotation Receipt Date Price Quoted 7. Ranking of Responsive Quotations by Price Name of Bidder Bidder’s price Evaluated Price 1.

2 3 4 5

5. Non-Responsive Quotations

Bidder Reason(s) for Rejection (reference to ITQ and specification).

1 2

9. Name of the lowest evaluated responsive Bidder

_______________________________________ 10. Total Price of the Contract Award (currency)___________ USD equivalent………… 11. Date of Contract award _______________ 12. Any issues (to be) discussed at finalization of contract. Give details. 13. Complaints from other Suppliers, if any. Provide details and attach a copy of complaint letter to the evaluation form. Date: ___________________________ Title / Name and Signature of Procurement Official or authorized person

45

Attachment 3 - Sample Format For Request Of Expressions Of Interest (Consultant Services) [COUNTRY] [NAME OF PROJECT] [insert sector] CONSULTING SERVICES Loan No./Credit No./TF No./Grant No. Project ID No. Expressions of interest The [insert name of borrower/beneficiary] [has received/has applied for/intends to apply for] financing from the World Bank toward the cost of the [insert name of project or grant], and intends to apply part of the proceeds for consultant services. The services include [insert brief description, implementation period, etc.]

8

The [insert name of implementing agency/client] now invites eligible consultants ( insert individual or firms) to indicate their interest in providing the above mentioned services. Interested consultants must provide information indicating that they are qualified to perform the services (brochures, description of similar assignments, experience in similar conditions, availability of appropriate skills among staff, etc. from firms and CV from individual consultants). Consultants may associate in the form of a joint venture or sub-consultancy to enhance their qualifications. . In case of a Joint Venture (JV), all members of the JV will be evaluated jointly for the purpose of short listing and shall be jointly and severally liable for the assignment and shall sign the contract jointly in case of award is made to that JV group. Interested consultants should clearly indicate the structure of their “association” and the duties of their partners and sub consultants in their application. Unclear expressions of interests in terms of “in association with” and / or “in affiliation with” and etc. without indicating the status of the partnership and designation of the lead partner may not be considered for short listing. A consultant will be selected in accordance with the procedures set out in the World Bank’s Guidelines: Selection and Employment of Consultants by World Bank Borrowers (January 2011 edition). Interested consultants may obtain further information at the address below during office hours [insert office hours if applicable, i.e. 09:00 to 17:00 hours]. Expressions of interest must be delivered to the address below by [insert date]. [insert name of office] Attn: [insert name of officer & title] [insert postal address and/or street address] [insert postal code, city and country] Tel: [include the country and city code] Fax: [include the country and city code] E-mail: Web site:

8 Provide enough information to allow potential consultants decide whether or not to prepare an expr ession of interest.

46

Attachment 4 Evaluation Report On Qualifications And Experience of Consultants For Selection Based On Consultant’s Qualifications (CQS) Country. Project Title: Loan/Credit/Grant Number: Date: 1. Implementing Agency (address, telephone/Fax No, email) 2. Name of consulting assignment: 3. Package number (per Procurement Plan): 4. Total estimated cost of assignment: 5. Assignment period: 6. Name of Publication and Date of advertisement requesting expressions of interest: 7. Deadline for submission of the expression of interest: 8. Members of Selection Committee (Name and Position of each member): 9. Criteria for evaluating Consultant’s qualifications and experience-[Total of all maximum

scores should add up to 100]

1. Overall experience of the firm (number of years) in the field of assignment (10 to 20) 2. Number of assignment-related contracts completed during last three years (20 to 40) 3. General experience and qualification of “staff skills” (10-20) 4. Work in region (20-40) 5. Knowledge of language of the client’s country (10-30)

10. Name of consultants who expressed interest in respond to the advertisement: 11. Rank list of consultants after evaluation of qualifications and experience as per 9 above:

Name of Consultants

Score Strengths Weaknesses

1

2

3

4

12. The following top ranking firm (the highest scoring) is recommended to be invited for submit a

technical and a financial proposal, which will become the basis of contract negotiations between the Client and the highest scoring firm.

13. Complaints, if any: _______________ Signatures of the Members of the Selection Committee: _________________

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Individual Evaluation Form (Long List)

Consultancy on ______________________________

Evaluated by: ______________________ (Name of Evaluator)

Name Of Company

Country Experience in the region

Experience in similar assignments

Main field of activities

Rating Average Group Rating (If applicable)

No. of Points, e.g. 30

No. of Points, e.g. 40

No. of Points, e.g. 30

Rating* (A) x (Points)

Rating*

(C) x (Points)

Rating*

(E) x (Points)

(B) + (D) + (F)

(A) (B) (C) (D) (E) (F) (G)

1.

2.

3.

Signed by: ____________________________________ Name of Evaluator: ____________________________________

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Sample Summary of Consultants’ Individual Evaluation Forms for the Consultancy _______________________ (Name of Consulting Assignment)

Evaluated by: Names of the Members of the Evaluation Committee

Name of Company

Experience in the region

Experience in similar Assignments

Main field of activities Rating Average Group Rating (if applicable) 30 Points 40 Points 30 Points

Rating* B1+B2+B3/ 3

Rating* D1+D2+D3/3

Rating* F1+F2+F3/3

(B) + (D) + (F)

(A) (B) (C) (D) (E) (F) (G)

1. 83.33

B1=25.00 B2=25.00 B3=25.00 25.00

62.50

D1=25.00 D2=25.00 D3=25.00 25.00

91.10

F1=25.00 F2=30.00 F3=27.00 27.33

77.33 I

B2=5.00 B3=10.00 5.00

D2=40.00 D3=40.00 40.00

F2=30.00 F3=25.00 28.33

3. 22.20

B1=20.00 B2=0.00 B3=0.00 6.66

80.00

D1=18.00 D2=40.00 D3=38.00 32.00

100.00

F1=30.00 F2=30.00 F3=30.00 30.00

68.66 III

4. 27.76

B1=0.00 B2=15.00 B3=10.00 8.33

66.65

D1=40.00 D2=20.00 D3=20.00 26.66

100.00

F1=30.00 F2=30.00 F3=30.00 30.00

64.99 IV

Note: Figures in the table are inserted as an example. Signed by ________________________ ________________________ _______________________ Name of Evaluator Name of Evaluator Name of Evaluator

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Attachment 5 Request for Proposals – Selecting A Firm Through CQ Date__________ To ___________________ ___________________ 1. The__________________ (hereinafter to referred to as the “Client”) invites you to submit a combined technical and financial proposals to provide the following consulting services: _______________. More details of the services are provided in the attached Terms of Reference.

2. Please submit your technical and financial proposals in accordance with the attached forms. Your proposals will be subject to negotiation between your authorized representative and the Client and may result in a contract. A draft contract is also attached. 4. Your technical and financial proposals should be submitted at the following address, not later than ____________Day/ Month/ Year 5. Please confirm receipt of this invitation by fax and that you will submit the proposals as requested Sincerely (Client’s authorized representative)

50

Technical Proposal Submission Form _____________[Date] To: ______________________ Ladies/Gentlemen: We, the undersigned, offer to provide the consulting services for implementation of the assignment as described in the attached terms of reference and in accordance with your Request for Proposal dated [……] and our proposals. We are hereby submitting our technical and financial proposals for the proposed services. Our proposals are binding upon us and subject to the modifications resulting from Contract negotiations. We understand you are not bound to accept any Proposal you receive. We remain, Yours sincerely, Authorized Signature: Name and Title of Signatory: Name of Entity:

51

Entity’s References Relevant Services Carried Out in the Last Three Years that Best Illustrate Qualifications Using the format below, provide information on each assignment for which your entity, either individually as a corporate entity or within an association, was legally contracted.

Assignment Name: _______________________________________________________ Location: _______________________________________________________ Name of Client: _______________________________________________________ Address and telephone of the Client: _______________________________________________________ _______________________________________________________

Professional Staff Provided by Your Entity (profiles):

_______________________________

No of Staff-Months:

_______________________________ Approx. Value of Services (in USD/or respective currency)

Entity’s Name:

52

Cost Estimate of Services and Schedule of Rates

(1) Remuneration

Name Rate (per working day)

Time spent (number of working days)

Total (currency)

Sub-Total (1)

(2) Reimbursables

1

Rate

Calendar days

Total

(a) International Travel

(b) Local Transportation

(c) Interpreter/Translation

(d) Per Diem

Sub-total (2)

TOTAL COST _________________________

CONTRACT CEILING __________________

1 To include expenses for international travel, local transportation, interpretation/translation, per diem,

visas, airport taxes, and other such travel related expenses as may be necessary; reimbursable at cost with

supporting documents/receipts; except for per diem (which is fixed and includes cost of housing, meals and

subsistence for the period spent in the country).

53

Attachment 6 Selection Of Individual Consultants For Advisory Services Letter of Invitation to the short listed individual consultants Dear …….., 1. You are hereby invited to submit your curriculum vitae (CV) as well as fee proposal for

providing the consulting services on ………..(brief description of services). 2. If selected, you would assist _............. (hereinafter referred to as “the Client”) with

_____________________. More details on the services are provided in the attached Terms of Reference.

3. Your experience and qualification shall conform to the requirement as specified in the terms of reference. The CV will be evaluated for the qualification and experience of the candidates in accordance with the following criteria:

(i) Specific experience relevant to the assignment - 20 (ii) Qualifications and competence for the Assignment - 60 (iii) Ability to work and transfer knowledge and skills to counterpart staff - 20 Total Points: 100 4. Following the evaluation of the CV’s of individual consultants, the candidate whose evaluation scores is the highest, will be invited to contract negotiations and signing. Contract will be negotiated personally, by phone or E-mail. In case of any delay by the consultant responding to the Client’s invitation for more than 07 days, the Client has right to withdraw the invitation. In case agreement is not reached for a contract, the negotiations with the individual consultant will be terminated and after seeking the Bank’s No Objection , new negotiation will be proposed with the next ranked candidate. 5. You will be requested to start your assignment by…………….. The Client will make its best

efforts to select a consultant during this period. 6. The estimated term required for the assignment is: …………….. 7. Please note that the cost of preparing a CV and of negotiating a contract is not reimbursable

as a direct cost of the assignment. 8. The following documents are attached to the Letter of Invitation:

I. Sample Format of Curriculum Vitae (CV) II. Cost Estimate of services and Schedule of Rates III. Terms of Reference IV. Draft contract

9. If you require further information on the assignment and the local conditions, you may contact Mr. …… at the following phone number and address: Your completed CV should be faxed or e-mailed or delivered to the above address before …………………….. 11. The Client is not bound to accept any of the CV’s submitted. 12. Please inform us, upon receipt: That you received the letter of invitation; and whether or not you will be submitting a CV.` Yours sincerely

54

Attachment 7 Evaluation Report - Selection Of Consulting Services, Individual Consultant

Country. Project Title: Loan/Credit/Grant Number: Date 1. Implementing Agency (address, telephone/Fax No 2. Name of consulting assignment:

3. Package Number (as per Procurement Plan): 4. Total Estimated Cost of Assignment: (Include fees, incidentals, travel costs, etc.) 5. Period of the Assignment: 6. Date of Issue of the LOI Or Request to Express Interest: 7. Name of individual consultants invited (list also those who expressed interest in response to

advertisements and/or GPN, if there was an invitation issued): 8. Evaluation Criteria basis:

I. General Qualifications -……..points

-----------------------

----------------------- II. Adequacy for the Project -…… points

-----------------------

-----------------------

----------------------- III. Language and Relevant Experience ---------points

-----------------------

-----------------------

-----------------------

9. Deadline for submission of CVs:

10. Name of consultants who expressed interest and submitted CVs: 11. Members of Evaluation Committee: (Name and Position of each member) 12. Consultants included on the Short List: (include at least three) Results of evaluation of CVs with respect to TOR and other evaluation criteria/requirements)

Name of Short Listed consultant

Strengths Weaknesses

1

2

3

14. Based on the substantial responsiveness of the best evaluated CV with respect to compliance

with technical and other related aspects specified in the TORs the following award of contract is recommended:

55

Name of the Selected Individual Consultant: Contract Price: …….. to be negotiated Period of Consulting/Services: to be negotiated Complaints, if any:_______________ Signature of the Chairperson of the Evaluation Committee: _________________

56

EVALUATION SHEET

Age General Qualification (---Points)

Adequacy for Project (---Points)

Language and Experience (---Points)

Staff Rating

Rating*

(A)

(A) x (Points) (B)

Rating* (C)

(C) x (Points) (D)

Rating* (E)

(E x (Points) (F)

(B) + (D) + (F) (G)

Consultant Names

-------------------

-------------------

-------------------

-------------------

* Footnote:

Rating: Highly Satisfactory 100% (or 1.0)

Satisfactory – 90% (or 0.9)

Good – 80% (or 0.8)

Poor – 60% (or 0.6)

Unsatisfactory – 50% (or 0.5)

Attachment 8 Sample Contract for Simple Consulting Services Small Assignments Time-Based Payments CONTRACT THIS CONTRACT (“Contract”) is entered into this [insert starting date of assignment], by and between [insert Client’s name] (“the Client”) having its principal place of business at [insert Client’s address], and [insert Consultant’s name] (“the Consultant”) having its principal office located at [insert Consultant’s address].

WHEREAS, the Client wishes to have the Consultant performing the services hereinafter referred to, and

WHEREAS, the Consultant is willing to perform these services,

NOW THEREFORE THE PARTIES hereby agree as follows:

1. Services (i) The Consultant shall perform the services specified in Annex A, “Terms of Reference and Scope of Services,” which is made an integral part of this Contract (“the Services”).

(ii) The Consultant shall provide the reports listed in Annex B, “Consultant's Reporting Obligations,” within the time periods listed in such Annex, and the personnel listed in Annex C, “Cost Estimate of Services, List of Personnel and Schedule of Rates” to perform the Services.

2. Term The Consultant shall perform the Services during the period commencing [insert start date] and continuing through [insert completion date] or any other period as may be subsequently agreed by the parties in writing.

3. Payment A. Ceiling

For Services rendered pursuant to Annex A, the Client shall pay the Consultant an amount not to exceed a ceiling of [insert ceiling amount]. This amount has been established based on the understanding that it includes all of the Consultant’s costs and profits as well as any tax obligation that may be imposed on the Consultant. The payments made under the Contract consist of the Consultant's remuneration as defined in sub-paragraph B below and of the reimbursable expenditures as defined in sub-paragraph C below.

B. Remuneration

The Client shall pay the Consultant for Services rendered at the rate(s) per man/month spent

1 (or per day spent or per hour spent,

subject to a maximum of eight hours per day) in accordance with the rates agreed and specified in Annex C, “Cost Estimate of Services, List of Personnel and Schedule of Rates.”

C. Reimbursables

The Client shall pay the Consultant for reimbursable expenses, which

1 Select the applicable rate and delete the others.

58

shall consist of and be limited to:

(i) normal and customary expenditures for official travel, accommodation, printing, and telephone charges; official travel will be reimbursed at the cost of less than first class travel and will need to be authorized by the Client’s coordinator;

(ii) such other expenses as approved in advance by the Client’s coordinator.

2

D. Payment Conditions

Payment shall be made in [specify currency] not later than 30 days following submission of invoices in duplicate to the Coordinator designated in paragraph 4.

4. Project Administration

A. Coordinator

The Client designates Mr./Ms. [insert name] as Client’s Coordinator; the Coordinator shall be responsible for the coordination of activities under the Contract, for receiving and approving invoices for payment, and for acceptance of the deliverables by the Client.

B. Timesheets

During the course of their work under this Contract, including field work, the Consultant’s employees providing services under this Contract may be required to complete timesheets or any other document used to identify time spent, as well as expenses incurred, as instructed by the Project Coordinator.

C. Records and Accounts

The Consultant shall keep accurate and systematic records and accounts in respect of the Services, which will clearly identify all charges and expenses. The Client reserves the right to audit, or to nominate a reputable accounting firm to audit, the Consultant’s records relating to amounts claimed under this Contract during its term and any extension, and for a period of three months thereafter.

5. Performance Standard

The Consultant undertakes to perform the Services with the highest standards of professional and ethical competence and integrity. The Consultant shall promptly replace any employees assigned under this Contract that the Client considers unsatisfactory.

6. Confidenti-ality

The Consultants shall not, during the term of this Contract and within two years after its expiration, disclose any proprietary or confidential information relating to the Services, this Contract or the Client’s business or operations without the prior written consent of the Client.

7. Ownership of Material

Any studies, reports or other material, graphic, software or otherwise, prepared by the Consultant for the Client under the Contract shall belong to and remain the property of the Client. The Consultant may retain a copy of such documents and software.

3

8. Consultant Not to be

The Consultant agrees that, during the term of this Contract and after its termination, the Consultants and any entity affiliated with the Consultant, shall

2 Specific expenses can be added as an item (iii) in paragraph 3.C.

3 Restrictions about the future use of these documents and software, if any, shall be specified at the end of Article 7.

59

Engaged in Certain Activities

be disqualified from providing goods, works or services (other than the Services or any continuation thereof) for any project resulting from or closely related to the Services.

9. Insurance The Consultant will be responsible for taking out any appropriate insurance coverage.

10. Assignment The Consultant shall not assign this Contract or Subcontract any portion of it without the Client's prior written consent.

11. Law Governing Contract and Language

The Contract shall be governed by the laws of [insert government], and the language of the Contract shall be

4 [insert language].

12. Dispute Resolution

5

Any dispute arising out of this Contract, which cannot be amicably settled between the parties, shall be referred to adjudication/arbitration in accordance with the laws of the Client’s country.

FOR THE CLIENT FOR THE CONSULTANT

Signed by ____________________ Signed by ____________________

Title: ________________________ Title: ________________________ LIST OF ANNEXES Annex A: Terms of Reference and Scope of Services Annex B: Consultant’s Reporting Obligations Annex C: Cost Estimate of Services, List of Personnel and Schedule of Rates

4 The law selected by the Client is usually the law of its country. However, the Bank does not object if the Client and the

Consultant agree on another law. The language shall be English, French, or Spanish, unless the Contract is entered into

with a domestic firm, in which case it can be the local language.

5 In the case of a Contract entered into with a foreign Consultant, the following provision may be substituted for paragraph

12: “Any dispute, controversy or claim arising out of or relating to this Contract or the breach, termination or invalidity

thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force.”

60

ANNEX 3 PROCUREMENT POLICIES FOR SERVICE PROVIDERS The cost of Service Connections and Household Wiring, despite being assessed as efficient, is high in Vanuatu as: (i) Vanuatu is a remote island state with a number of dispersed island grids; (ii) all equipment and the majority of qualified labor is international; and (iii) there are limited economies of scale due to the size of the sector. Service Connections: UNELCO follows the competitive bidding procedures in outsourcing its connection services (except for materials) by consideration of by both quality and cost, for Port Vila. Since Tanna and Malekula do not have competitive market for connection services, UNELCO may provide connection services by using their own "in house" resources, or use their trained and authorized contractors or use the same contractors selected through the competitive bidding process for Port Vila, depending on the circumstance. Materials for Service Connections are sourced from selected suppliers by UNELCO and provided to the contractors for purpose of Service Connections. VUI makes Service Connections by using their own “in house” resources as Luganville does not have a competitive market for such services. In some circumstances, VUI may use trained and authorized contractors to provide connection services. Household Wiring: Both UNELCO and VUI will follow the same arrangements as described for the Service Connections.

61

ANNEX 4: GRANT AGREEMENT

62

63

64

65

66

67

68

69

70

71

72

73

74

75

ANNEX 5: DISBURSEMENT LETTER

76

77

78

79

80

81

82

83

84

85

86

87

88

89

ANNEX 6: INITIAL PROCUREMENT PLAN

Vanuatu: GPOBA Improved Electricity Access Project

P133701

Procurement Plan

Support for Department of Energy (DoE)

I General

1. Project information:

Country: Vanuatu

Project Name: Global Partnership for Output Based Aid (GOPBA) Improved Electricity Access Project

Project Implementing Agency (PIA): Department of Energy (DoE)

Scope of work: Support for the DoE for project management and supervision, communications and outreach,

training and independent verification of outputs. It would consist of advisory assistance and capacity-building

for the DoE, in particular with the development and adoption of technical standards for Household Wiring.

Project Funding: US$4.85 million (GPOBA) – TF016279

2. Bank’s approval Date of the procurement Plan: TBC.

3. Date of General Procurement Notice: TBC.

4. Period covered by this procurement plan: July 2014 - December 2018

I Goods and Works and Non-consulting Services

1 2 3 4 5 6 7

Ref

No.

Description of

Goods

Estimated

Cost (USD)

Selection

Method

Review

by Bank

(Prior/

Post)

Expected

Contract

Sign

Date

Comments

1 Vehicle 45,000 shopping Prior August

2014

To be used

for Efate

provincial

consultatio

ns and

implementi

ng the

support for

project

communica

tions and

outreach

and

training

2 Laptop (×2) 3,000 shopping Post August

2014

3 Camera/video 1000 shopping

Post August

2014

Total $49,000

III. Selection of Consultants

90

1. Prior Review Threshold: Selection decisions subject to Prior Review by Bank as stated in Appendix 1

to the Guidelines Selection and Employment of Consultants:

Selection Method Prior Review Threshold

1. Competitive Methods (Firms) ≥US$100,000

2. Single Source (Firms) All contracts

3 Selection of Individual Consultants ≥US$50,000; all legal related and procurement

related assignments regardless of value, and all

SSS contracts

2. Short list comprising entirely of national consultants: N/A

3. Consultancy Assignments with Selection Methods and Time Schedule

1 2 3 4 5 6 7

Ref

No.

Description of

Assignment

Estimated

Cost (USD)

Selection

Method

Review

by Bank

(Prior/

Post)

Expected

Contract

Sign

Date

Comments

1 Independent

Verification Agent $200,000 IC*

Prior September

2014

2 FM Specialist $80,000 SSS** Prior June 2015

3

Information

Management and

Communications

Specialist

$70,000 SSS

Prior June 2015

4 Auditor $40,000 CQS*** Post May2015,16

, 17,18

Annual

Audits

5 Project Admin

Assistant $45,000 SSS

Prior June 2015

Total $435,000

Note to table: * IC = Individual Consultant Selection

**SSS = Single Source Selection (continuation of services under those positions previously

competitively selected and funded under ESMAP)

***CQS= Consultant’s Qualifications based Selection

ANNEX 7: OUTPUT VERIFICATION REPORT TEMPLATE

OUTPUT VERIFICATION REPORT

OVR Template for: first tranche of subsidy payments for prepaid Service Connections and

Post-paid Service Connections

To be prepared by the Independent Verification Agent and submitted to the Department of Energy.

1. Basic Details

OVR Report No.:

Date of OVR Report:

OBA Subsidy Claim No.:

(Attach Claim at Appendix A)

Total OBA Subsidy claimed:

Date of Claim:

Total No. Outputs (Service Connection &

Household Wiring) in Claim:

Name of Service Provider:

Concession area(s) included in claim:

2. Summary of Desktop Assessment of Claim for OBA Subsidy

The IVA will provide a summary of the desktop assessment of all Service Connections made and

households wired under each claim for OBA Subsidy and attach a Service Connection and Household

Wiring report, including detailed calculations (OVR template spreadsheet) in Appendix B. This will

include the following details:

a) Number of installations that have been completed to the required standards (number of postpaid

Service Connections; number of prepaid Service Connections; number of meter only connections;

and, number of households wired);

b) Evidence of targeting of beneficiaries (beneficiaries meet are Eligible Households and comply

with the household eligibility criteria);

c) User contribution has been received by the service providers (e.g. upfront contribution);

d) Services provided and billed (included invoiced amount and identified amount eligible for OBA

Subsidy);

e) Average cost per Service Connection by type (pole, no pole, and meter only, postpaid, prepaid

and overall) and Household Wiring.

f) Total amount of OBA Subsidy claimed and average subsidy amount per Service Connection by

type (pole, no pole, and meter only, postpaid and prepaid, and overall) and Household Wiring for

92

each household. The report is to include overall average subsidy amount for per Service

Connection and Household Wiring for each Service Provider and the project and provide an

explanation where the expected average subsidy amounts for Service Connections exceeds

VUV45,000.

If any Service Connections failed to meet the household eligibility criteria or required standards, the IVA

should clearly summarize the reasons for the failure.

Data required to be provided by the Service Providers to DoE/IVA to be submitted with the Service

Providers claim for OBA Subsidy:

- Individual Customer Application Form (including number female headed household applicants)

- Invoice for Service Connection and Household Wiring and total consumer contribution paid toward

Service Connection and Household Wiring

- Certificate or verification that the Service Connection and Household Wiring has been done to standard.

Table 1: Summary of Desktop Assessment

Service Connection and

Household Wiring

No. Claimed No. eligible

connections

No. not eligible

connections

Average cost

of outputs

Average

consumer

contribution paid

Average

OBA

Subsidy

claimed

Prepaid Service

Connections

With pole

Without pole

Postpaid

Service

Connections

With pole

Without pole

Meter only connection

Total

Households wired

Note: Prepaid Service Connection is not currently applicable to VUI.

3. Summary of Site verification Visit of a Random Sample from Claim for OBA Subsidy

The IVA will undertake a physical inspection and verification of a random sample of at least 20 percent

from each claim for OBA Subsidy in the first year and at least 10 percent in subsequent years of the

Service Connections and Household Wiring being made. The IVA will detail the events and persons

involved in the outputs verification site visits. The IVA will provide a brief description of the approach

adopted to verify the Service Connections made and households wired. For example, physical inspection

of the household to certify that Household Wiring and Service Connections (pre-paid or post-paid) have

been completed as per the claim for OBA Subsidy and in accordance with the connection criteria

contained within the POM and ESMF. Details of the site verification visits are presented in Appendix C.

This will include the following details:

a) Persons involved in verification of outputs;

b) Verification of completion and functionality of outputs (Service Connection and Household

Wiring):

c) Technical assessment (verify meter, amp size, wiring design; verify trenches have been

completed and sealed, site is free of construction debris)

d) GPS positioning of household and concession area

e) Photograph of verified outputs

f) Feedback from the beneficiaries as to their level of satisfaction

The IVA shall be required to detail if there were any technical issues found with the household Service

Connections and Household Wiring. In particular, if any households were found to have failed to meet the

Eligible Household criteria at the time of inspection or if details of outputs do not match the details in the

claim for OBA Subsidy.

Table 2: Summary of Site Verification Visit

No. of

households

visited

No. Female

headed

household

No. eligible

connections

No. not eligible

connections

Average cost

of outputs

Prepaid Service

Connections

With pole

Without pole

Postpaid Service

Connections

With pole

Without pole

Meter only connection

Households wired

Note: Prepaid Service Connection is not currently applicable to VUI.

4. Conclusion and Recommendations

Recommend amount of subsidy payments for payment of OBA subsidies for eligible postpaid Service

Connection, prepaid Service Connections, meter only Service Connection (postpaid and prepaid) and

Household Wiring. Include adjustments for any ineligible outputs.

In case the outputs are not fully achieved:

a) Recommend part subsidy payments showing the details of calculating the subsidy and detail the

total amount of subsidy to be paid and the total amount to be deducted from the next claim for

payment by postpaid connection and prepaid connection, if any.

b) State how Service Provides can improve the outputs and the expected period of time required.

c) Recommend by when an additional Output Verification Site Visit should be undertaken.

Signature of IVA

Name

Date

Appendix A: Claim for OBA Subsidy

Appendix B: Summary of Service Connection and Household Wiring report and OVR template

spreadsheet

Appendix C: Summary of Site Verification Visit

97

OVR Template for: second tranche of subsidy payments for Post-paid Service Connections

and verification that no one has upgraded

To be prepared by the Independent Verification Agent and submitted to the Department of Energy.

1. Basic Details

OVR Report No.:

Date of OVR Report:

OBA Subsidy Claim No.:

(Attach Claim at Appendix A)

Date of Claim:

Report No. for OBA Subsidy Claim (first

tranche of reimbursement for postpaid

connections):

Date of Claim for OBA Subsidy Claim

(first tranche of reimbursement for OBA

Subsidy):

Total amount of OBA Subsidy paid for

the claim for postpaid Service

Connections (first tranche of

reimbursement for OBA Subsidy):

Name of Service Provider:

Concession area(s) included in claim:

3. Assessment of Postpaid Service Connections Still Active

The IVA will provide a desktop review of all postpaid connections made under the claim for OBA

Subsidy that at least 80 percent of the postpaid connections are still active after 3 months. An ‘active’

connection refers to one that has not been disconnected from the utility service for non-payment only or

one that has switched over from pre-paid. A Service Connection that has been disabled for any other

reason, such as consumer relocation, safety etc. will not be counted as a non-active connection. The IVA

will review the financial and service records examined to ascertain the level of output attained and

undertake to call a random 20 percent of households of post-paid connections to confirm active

connection with residents. Supporting documents are attached in Appendix B.

Data required to be provided by the Service Providers to DoE/IVA to process claim for OBA Subsidy:

- Biller records to verify customer use of services and active Service Connection

- Record of any disconnection or of non-active connections

98

Table 1: Summary of Desktop Assessment (Postpaid connections)

No. of postpaid

connections

reviewed

No. of postpaid

connections under

original claim

No. eligible

connections under

original claim

No. Eligible

connections still

active

Total %

connections still

active

If the level of attainment is not 80 percent for all indicators, then the IVA will provide comments on the

possible causes for the partial attainment of the output.

3. Assessment of Upgrading Households

The IVA will provide an assessment of how many households have sought to upgrade the installed

Service Connection within 12 months. If a connection is made in the final year of the project, the 12

month restriction will be lifted and replaced with the restriction to upgrade the physical connection will be

from the fate of connection until the closing date of the project. In the event that a household upgrades

within the restriction period, a refund of the Service Connection subsidy and Household Wiring subsidy

must be made to the Service Provider. A report detailing the number of refunds for Service Connections

and Household Wiring subsidies, the total dollar value of the refunds paid to the service providers, and

reasons why the household upgraded is attached at Appendix C. The subsidy repaid by the household

must equal the amount of subsidy paid to the service provider under the first claim for OBA Subsidy for

the household.

Data required to be provided by the Service Providers to DoE/IVA to process claim for OBA Subsidy:

- Record of Service Connection upgrade, including household details and reason for requesting the

upgrade

- Payment records demonstrating repayment of OBA Subsidy to Service Provider

99

Table 2: Summary of Upgrading Household

No. upgrading

households

No. prepaid

connections

upgraded

No. postpaid

connections upgraded

Average subsidy amount

refunded

(for Service Connection and

Household Wiring)

4. Conclusion and Recommendations

Recommend second tranche of OBA Subsidy payments if the outputs are fully achieved as per

requirements.

In the event that less than 80 percent of the post-paid connections are active, the remaining 20 percent of

the subsidy will be paid on a proportional basis calculated as: the number of active connections / total

connections made under the claim multiplied funds outstanding.

Signature of IVA

Name

Date

Appendix A: Original Claim for OBA Subsidy

Appendix B: Summary of Service Connections Sill Active and updated OVR template spreadsheet

Appendix B: Details of the number of refunds made for upgrading households

100

ANNEX 8: SAMPLE CONSENT LETTER Property No. (if applicable) _____________________________

Property Owner Name: __________________________________

Address___________________________________ Phone___________________

I, _______________________________________________________________________

Name

give the (applicant):____________________________________________________________________

Name

residing

at____________________________________________________________________________

City & Area Name

Hereby give Permission to:

[ ] have access to my Land/Property

[ ] install Utility Meter Box on my Land/Property

[ ] dig cable trench on and/or through my Land/Property onto to his/her Land/Property

[ ] access my Land/Property for any other purpose of the GPOBA project

Please do not hesitate to contact me on the above contact details should you require further information.

PROPERTY OWNER SIGNATURE: __________________________________________________

Owner

Dated this ____ day if ____, 20___

_______________________________________________

Print Name

101

ANNEX 9: PROJECT REPORT

PROJECT REPORTS (1/3)

Name and contact details of recipient:

Project Title & Country:

Grant amount:

Title of trust fund:

Name of TTL:

Report Submission dates:

1st

Progress Report date:…………………………………..…..

2d Progress Report date:

3d Progress Report date:……………….

…………………………….

Project Closing date:……………. Grant Closing date if different: ……………………..

Overall Project Report

Project Development Objective (PDO): to increase sustainable access to formal grid-based electricity

services within Vanuatu’s electricity concession service areas for low income customers through

targeted subsidies

Please provide a brief description of the following:

1- Progress to date of the achievement of the project development objectives in line with the objectives

stated in the project paper for the Small Grant/Concept Memo for the micro grant:

1st

Progress Report ………………………….[insert description]

2d Progress Report……………………….. [ insert description]

[add lines for additional reporting periods as needed]………………………………………………………..

2- Progress to date of the achievements of the milestones, indicating the outputs in quality and quantity:

PDO Level Results Indicators* Unit of Measure Baseline Cumulative Value

Indicator One:

People provided with access to

electricity under the project by

household connections

Number 0

Indicator Two:

People continuing to utilize

electricity connections three months

after connection

Number 0

Indicator Three:

Community contributions (customer

co-contribution) to total project cost

USD 0

102

Indicator Four:

Wiring rules (Standards) adopted

and a certification regime in place:

a. Process Established

b. Consultations Commenced

c. Regulations and standards

determined/ Training Plan

d. Implementation commenced

Standards 0

Intermediate Results Indicators* Unit of Measure Baseline Cumulative Value

Intermediate Result indicator

One:

People qualifying for a new

household connection to the utility

network under the project

number 0

Intermediate Result indicator

Two:

Annual volume of electricity (kWh)

sold to all Low Income Households

connected under the project

kWh 0

Intermediate Result indicator

Three:

Annual revenue generated from

electricity sales to Low Income

Households connected under the

project

USD 0

Intermediate Result indicator

One:

Low Income Households receive

Household Wiring to standards

design under the project

number 0

Intermediate Result indicator

Two:

Number of electricians employed

number 0

103

and receive training to install project

design standard Household Wiring

Intermediate Result indicator

One:

Low Income Households received

an information bulletin on household

electricity safety under the project

number 0

Intermediate Result indicator

Two:

Community groups who received an

information bulletin about the

GPOBA subsidy available under the

project

number 0

Intermediate Result indicator

Three:

Women’s groups who received an

information bulletin about the

GPOBA subsidy available under the

project

number 0

3- Any issues encountered in achieving the objectives? the outputs? With a brief description of the reasons,

the actions taken to resolve these issues, and the impact of the current level of progress on the

achievement of the project objectives per the Results Framework and Monitoring plan.

1st

Progress Report ………………………….[insert description]

2d Progress Report……………………….. [ insert description]

4- A description of any other risks to the achievement of the project objectives per the plan and how the

recipient plans to mitigate for these risks and by when.

1st

Progress Report ………………………….[insert description]

2d Progress Report……………………….. [ insert description]

5- Any proposed changes to the project implementation plan and why?

1st

Progress Report ………………………….[insert description]

2d Progress Report……………………….. [ insert description]

ESMF REPORTING

Report on the results of monitoring the status of compliance with the ESMF and RPF activities during the period covered by the Report, giving details of:

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(a) Measures take in furtherance of the ESMF and RPF; (b) Conditions, if any, that interfere or threaten to interfere with the smooth implementation of the

ESMF and RPF; (c) Remedial measures taken or required to be taken to address such conditions. (d) Reports on any grievance (following grievance process in the ESMF)

FINANCIAL REPORTING [THIS IS A TEMPLATE. FINANCIAL MANAGEMENT STAFF (FMS) on the Task Team is

responsible for customizing this template to fit individual needs of a grant prior to the effectiveness] – refer

GPOBA Budget and reporting templates for relevant IFR template.

Sources and Uses of Funds Statement [in (currency of advance)] for [3 months] ending month/day/year

PROCUREMENT REPORTS (2/3)

Insert an updated Procurement Plan

Aggregate (cumulative) list of all signed contracts and amendments, updated

on………….month/day/year

Contract

Number

/Reference

to

Procurement

Plan

Name of

Contractor/Supplier/Consultant

Contract

Amount

[add lines

below for

each

amendment]

Contract

date

Contract

completion

date (as in

signed

contract)

Status of

completion on

the date of the

report

FOR INTERIM FINANCIAL AND PROCUREMENT REPORTS - MITIGATING ACTIONS (3/3)

FM action required Status of implementation

PR action required

105

ANNEX 10: Standard Wiring Design